Weekly column: Economic tides turn in favorable direction

Review

The U.S. economy is approaching what most economists had thought either unlikely or impossible: inflation returning to its prepandemic norm without a recession or even much economic weakness, a so-called soft landing. Six months ago, the consensus among economists surveyed by The Wall Street Journal was that the economy would enter a recession over the next 12 months. In October’s survey, the average forecast of economists was for no recession. After Tuesday, the probability appears to have dropped further. If they are right, it would be highly unusual. In the past 80 years, the Federal Reserve has never managed to bring inflation down substantially without sparking a recession. – David Harrison and Jeffrey Sparshott, “Economy Closes In On a Soft Landing,” Wall Street Journal, November 16, 2023.

Add falling supplier prices to the good inflation news of the week. The producer-price index fell 0.5% in October from the previous month, the largest single month decline since early in the pandemic. That follows a cooler-than-expected consumer inflation report for October released on Tuesday, which showed that consumer price growth was flat from the prior month. The encouraging readings likely confirm that the Federal Reserve is done raising rates in its current cycle. – Gabriel Rubin, “More Good News on the Inflation Front.” Wall Street Journal, November 15, 2023.

It was a red-hot week on the geocosmic front, and this translated into a positive week for most global stock indices. That is, the Sun and Mars (both considered “hot planets” in astrology) conjoin on Saturday, November 18. But both were in opposition to Uranus, the planet of disruption, November 11 and 13. With Uranus, one never knows if markets will reverse or “break out” above multi-month resistance levels or below multi-month support levels. In this case, many global equity markets broke out above resistance amidst Tuesday’s very welcomed inflation numbers were announced.

In the Dow Jones Industrial Average, for instance, prices “gapped up” well above their highs of October on Tuesday morning, November 14, after the first favorable reports came out. The rally, which started from the low of 32,327 on October 27, reached a high of 35,051 last week. That’s a gain of 8.4% in less than three weeks after having dropped over 9% from its yearly high on August 1. This fits perfectly with other studies reported in this column about the history of the Sun/Mars conjunction, namely that prices will fall at least 8% and rally at least 8% into and out of that aspect within an 8° orb.

The favorable inflation reports were also positive for commodities and other markets. Gold jumped from a major cycle low of 1935.50 on Monday, November 13, to a high of 1996.40 on Friday, November 17. Silver rallied from 21.92 on Monday to a high of 24.22 on Friday. In both cases here, the aspects with Uranus were reversals and not breakouts of support or resistance. Bitcoin was more erratic and consistent with the nature of Uranus. First, it dropped to a weekly low of 35,000 on November 14, then surged to a new yearly high of 37,973 two days later before starting another pullback. Crude Oil was also erratic as it continued to break down to new five-month lows after first rallying into Tuesday, November 14, at 79.77, then tanking to 72.16 two days later. Thus, last week was an upside breakout of resistance in stocks, a downside breakout of support in Crude Oil, a new yearly high in Bitcoin, and a normal reversal in Gold and Silver. Uranus, the planet of the unexpected and non-conformist, was alive and well last week in financial markets.

Short-term geocosmics and longer-term thoughts

Boston Federal Reserve President Susan Collins said Friday that more interest rate hikes could yet be needed to bring down inflation. – Jeff Cox, “Fed’s Susan Collins Says More Rate Hikes Can’t Be Taken Off the Table Yet,” Jeff Cox, www.cnbc.com, November 17, 2023.

“We are not going to have any more inflation,” – Jeremy Siegel, CNBC’s “Closing Bell,” www.cnbc.com, November 15, 2023.

Until recently wages have just not kept up with inflation. Consumers have been able to maintain living standards, but have had to consciously dip into savings to do so. That is a regular reminder that inflation has damaged living standards. Perhaps the biggest problem for politicians trying to take credit for lower inflation is consumers often focus on price levels. The relative price stability pre-pandemic has created a mental idea of what the price of an item “should” be. There is a tendency to feel aggrieved that today’s price level is so much higher, even if the pace of price increase has slowed. Dr. Paul Donovan, “Politics and Prices,” UBS Weekly Blog, November 17, 2023

The good times might just keep rolling along in global stock markets as we enter the season of Sagittarius. That is, the Sun enters the sign of optimism and cheer on Wednesday, November 22, lasting through the winter solstice, which takes place on December 21. Usually, this is a favorable seasonal time for stocks. But there have been exceptions.

There may be some headwinds this year as the Sun and Mars will now move from their opposition with Uranus to a square aspect with Saturn, which is posited in early Pisces, November 23-25. This is the Thanksgiving holiday in the U.S., and markets will be closed those two days but open on Friday, November 24, when Mars will also enter Sagittarius. With Mercury also in Sagittarius 0from November 10-December 1, there will likely be plenty of firepower to continue the stock market rally.

However, the Sun and Mars in Sagittarius square Saturn in Pisces are indicative of a further propaganda war involving Israel and her neighbors in the Middle East. Mars in Sagittarius/Capricorn (November 24-February 13) is often a time of war threats involving Israel. Plus, it is a time when Crude Oil prices tend to spike. The rhetoric between opposing sides continues to escalate with no sign of relenting next week, perhaps until Neptune (planet seeking peace) turns stationary direct on December 6. But even after that, Mars is still on the offensive while in Sagittarius and sometimes into Capricorn. The winners are those who sell oil and those who are most organized and plan well in strategic or military matters (Mars in Capricorn).