Markets plunge on arrest of Huawei CFO; Trump's endgame looms

(10 December 2018) One big reason for my interest in financial markets is because they offer a unique window on collective sentiment in the world.  We can read any number of media think pieces on the importance of this or that issue, but markets are an important weather vane for what people -- and their money -- are concerned with.  How much are investors worried about US-China trade?  Well, look no further than last week's decline which arrived after it became clear that the so-called truce in tariffs had little substance, despite President Trump's assertions to the contrary.  The Dec 1 arrest of the Huawei CFO in Vancouver only made matters worse for financial markets, as it looked like a crude US power play designed to force China's hand in negotiations.  

The week unfolded more or less as forecast in this space last week as Monday's bullish Moon-Venus-Uranus alignment produced only one up day after which the market sold off hard falling by 5% in the US and a more modest 2% in India.  As I noted, the planetary alignments were quite bearish through most of the week and argued for some downside.  The negatives were considerable: the Sun squared the Mars-Neptune conjunction, and this alignment hit a key point in the NASDAQ chart (a key horoscope symbolizing the entire stock market), and Mercury stationed direct in exact alignment with Rahu, the North Lunar Node at the end of the week. 

But the other factor that is percolating in the background these days is the deteriorating presidency of Donald J. Trump.  In recent days, we have seen new charges against former campaign manager Paul Manafort and former personal lawyer Michael Cohen.  These charges not only directly implicate Trump in criminal actions, but they are also strengthen the case for collusion in that "Individual-1" knew about the dirt the Russians and Wikileaks were offering about Hillary Clinton during the 2016 campaign.  Liberal media outlets like the NYT and WaPo are now suggesting the endgame against Trump has begun while Trump continues to spew his venom against all and sundry on Twitter.

Trump's December planetary problem

But I wonder when the accusations against Trump will finally start to impact financial markets.  So far, it has been hard to argue that the Mueller investigation has had any impact on stocks.  Even last week's significant news was overshadowed by developments on the China front.  I think it may take new indictments, such as against Don Trump Jr. or advisor Roger Stone to further erode Trump's position in the White House.  This, in turn, could force financial markets to begin to seriously consider the possibility that Trump may not finish his term.  As I have written previously, I don't think Trump will last until 2020.  But financial markets have yet to factor in the possible fallout from a protracted impeachment process which could damage US financial stability. 

If we examine Trump's chart in December, we can see he is really up against it now: Saturn is exactly opposite his 11th house Mercury indicating denial of wishes and setbacks involving finances.  This includes national finances since Trump is president so that is another reason why the stock market has been so weak recently.  The other key factor is the transit of Mars through sidereal Aquarius.  This is squaring Trump's Taurus planets and it one reason why things are so difficult for him now.  Mars symbolizes conflict and enemies so as long as Mars remains in Aquarius (until Dec 22), Trump will be on the defensive on several fronts.   These next couple of weeks is a more likely time when the boom could come down on Trump so that financial markets will have to react.

Of course, since Trump has staked a lot of political capital on the stock market, he is also likely to try to boost the market through whatever means it his disposal. This could mean more jaw-boning from him and his advisor Larry Kudlow, or he may be able to suddenly push the US-China trade talks towards some constructive resolution. 

In that sense, even Trump's imminent political demise may not be bad news for stocks if he can find ways to distract markets and thereby soften the blow.  I would also note the Federal Reserve is due to meet next on Dec 19 right in the middle of that nasty Mars transit for Trump.  If the Fed is sufficiently dovish in its statement and argues to postpone further rate hikes, then the market could rally even if Trump sinks further into the political quicksand.

Weekly Market forecast

The planets this week lack the bearish clarity of last week.   If last week had a financial astrology index reading of just 20 (out of 100), this week looks more middling, say in the 40-50 range as an overall weekly average.  This means that gains or losses may be more equally possible, although the lack of clarity would seem to suggest that a strong move in either direction is somewhat less likely. 

The relative proximity of the bearish Sun-Mars-Neptune alignment may make the first half of the week a bit more bearish than the second half, although since it is now separating I would think it will not carry as much negative energy.  And while Mercury is now moving away from its bearish alignment with Rahu (North Node), it will briefly form a minor alignment with Neptune early in the week (e.g. Tuesday, see chart) so that could signal another source of uncertainty and confusion that undermines markets.

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