Weekly column: Navigating market uncertainty in the year-end

Review

A week’s long rally in stocks and government bonds has shown no signs of slowing down. The Dow rose for the fifth consecutive week, its longest winning streak since 2021. The S&P 500 jumped to its highest closing level since March 2022 after setting a new yearly high on Thursday. Je Wallace and Gunjan Bonerji, “Dow Finishes Above 36,000 After Notching 2023 High,” Wall Street Journal Online, December 1, 2023.

Mortgage rates have fallen more than half a percentage point over the past month, the largest four-week decline since late 2022. Home prices, meanwhile, have continued to rise to record levels. Gina Heeb, “Mortgage Rates Fall Five Weeks in Row,” Wall Street Journal, December 2023.

The red-hot U.S. stock market continues to be… well, red-hot since the 50-week cycle low on October 27. With Mars (the red planet associated with heat and hot) and the Sun (which is really hot), both in the fire sign of Sagittarius, there has been nothing to hold back this surge to new yearly highs and possibly even to new all-time highs soon. Mercury has also been in Sagittarius, but the planet of commerce and thinking moves into the Capricorn now, the sign of the skeptic and cold, hard truth. There might be some critical thinking this weekend, reassessing the latest bull run and how long it might last.

Not all U.S. markets made new yearly highs last week. Despite the S&P 500 cash making a new closing high, the S&P futures (and cash) remained below their yearly intraday peak from July 27 when Venus was turning retrograde. That was followed by the steepest decline of the year over the ensuing three months.

Strong rallies to new multi-month highs were also posted in the German DAX and Netherlands AEX indices. In Asia and elsewhere, the Indian NIFTY index made a new all-time high, and the Bovespa in Brazil is close. But China and Hong Kong went in the opposite direction, with the Hang Seng falling to a new yearly low. Not that long ago, everyone was touting the growth opportunities in the Far East. But it’s back to the USA now.

Stock markets weren’t the only financials on fire. Gold surged to a new all-time high on its highest volume contract (February). It soared to 2095.70 on Friday. The December contract fell a little short with a high of 2073.50. Silver rallied to 25.94, its highest level since May. Bitcoin tested 39,000, a mark not seen since May 2022. Crude Oil, however, continued to lag near the lows of a congestion zone between 72.00-79.00.

Short-term geocosmics and longer-term thoughts

But as Larry Arnn, president of Hillsdale, points out, what America really needs from Harvard is clear thinking. “If colleges abandon their final cause, which is truth, their formal cause, which is civil discourse, soon breaks down into bullying, canceling, and extortion,” Mr. Arnn says. “That disaster has struck colleges deeply, and now it spreads into the society. We become unable to distinguish the murderers from the defenders of children.”  William McGurn, “Harvard’s Hamas Confusion,” Wall Street Journal, Nov 28, 2023.

By 2025, the strain of running a war may start to catch up with Mr. Putin. Russians may increasingly resent the forced mobilisations, inflation and diversion of social spending to the army. Yet simply hoping that his regime collapses makes no sense. He could remain in power for years and if he does, he will threaten war because that is his excuse for domestic repression and his own people’s suffering. He has blighted his country’s prospects by isolating it from Europe and driving its most enterprising people into exile. Without war, the hollowness of his rule would be on full display. – “Putin Seems to be Winning the War in Ukraine—For Now,” The Economist, November 30, 2023.

The German tabloid “Bild” said the quiet part out loud. President Biden and German Chancellor Olaf Scholz, plan to force Ukraine into peace talks next year by denying it the weapons needed to win. This creates a dilemma for those who know that Ukraine’s fate matters deeply to the U.S. but who can also see that Team Biden is more interested in avoiding confrontation with Russia than in defeating it. To oppose aid to Ukraine is to ensure a Russian victory, but funding Mr. Biden’s approach will do little to prevent one—and will further erode public support for America’s global engagement. Walter Russell Mead, “How to Avoid Defeat in Ukraine,” Wall Street Journal, November 27, 2023.

Last week’s comments on markets bear repeating: “The Sun is now in the optimistic (and sometimes overly optimistic) sign of Sagittarius as of November 22. As expected, equity prices moved higher. Mercury and Mars are also in Sagittarius, supporting the bullish influence of global and U.S. equity markets. But that will begin to shift when Mercury ingresses into the more skeptical sign of Capricorn, December 1-23. Along the way, Mercury will turn retrograde on December 13, lasting through January 1, which indicates end-of-the-year trading may be “tricky.” So far, so good.

There are other geocosmic signatures arising this week that may lead to a correction of the trend (but not a reversal of the primary trend). On Sunday, December 3, Venus (money and credit) will square Pluto (debt) one day before Venus (credit and money) enters Scorpio (ruled by Pluto and thus the sign of debt). This could also signal a reversal in markets ruled by Venus and Pluto, such as Soybeans, Treasuries, and Currencies. On a personal level, Venus rules love, partnerships, and relationships. In a square aspect to Pluto, moving into Scorpio, uncomfortable situations may arise where one party may try to exit from a deal and not be forthright with the other over the matter. It may be the end of the party if hidden agendas are revealed.

Then there is the issue of Neptune turning retrograde on December 6 next week. Now, the secret and hidden agendas are out, but then comes another cover-up. This week is a challenge for honesty and truth. In terms of market psychology, it may be one of those “buy the rumor, sell the facts” (or vice-versa) issues driving prices. Be careful of rumors or deceptive behavior and get the facts and truth. In terms of market behavior, watch Crude Oil for reversals. This atmosphere of uncertainty or wishful thinking may persist into December 21. In fact, market prices may act confused and uncertain as the Sun will also square Neptune on December 17, right after Mercury turns retrograde on December 13. The Trickster could be in all its glory with Neptune so prominent, too. When Mercury and Neptune are highlighted close together, fact-checkers will be called upon to work overtime. Truth and accuracy are at a premium and hard to find. It may be fine for fun and jollity as the holiday approaches, but promises or agreements made during this period are not to be taken too seriously. Choose fun and jollity and avoid situations that may compromise your integrity.