May 21, 2024

MVA Investor Newsletter Preview — Week of 8 April 2024

(8 April 2024)  Stocks ended lower after a volatile week that saw bond yields rise after a strong jobs report and more hawkish comments from Fed governors.  The S&P 500 fell about 1% on the week to 5204 while the Nasdaq-100 finished at 18,108.  While this bearish outcome was not unexpected given the Mercury retrograde station and the Sun-Rahu conjunction, I thought we might have seen more early week gains from the Mercury-Venus-Neptune alignment.

Inflation concerns are front and center once again after the NFP jobs report continued to show a fairly robust labor market.  While there is some appropriate skepticism about a labor market that only creates part-time jobs, the spike in bond yields is bad news for the soft landing narrative.  With election year government spending likely to fuel even higher deficits and greater market liquidity, the prospects for rate cuts is fading.  Even typically dovish Fed governors like Bostic and Kashkari suggested that there may only be one or even no rate cuts this year given persistent inflationary pressures and a tight labor market.  This was bad news for the equity market which had priced in at least three cuts and was looking forward to cheaper borrowing and a reinvigorated real estate sector.  The benchmark 10-year yield is now trading above its Oct 2022 high of 4.25% and made a short term higher high last week closing at 4.39%.  With support holding firm at the 50 WMA, yields seem likely to push higher with unpredictable consequences for the stock market.  And with telltale commodities like gold, copper and oil pushing higher, there are growing fears of a return to a 1970s-style inflation.

The planetary outlook is mixed.  This week looks vulnerable to more downside as Mars conjoins Saturn and aligns with Rahu, the North Lunar Node.  And yet, the bullish Jupiter-Uranus conjunction is likely to coincide with some additional upside up to its April 19 exact alignment.  This is a fairly reliable bullish influence that could preclude a major sell-off from taking place in the near term.  While I would still expect some selling this week upcoming, it may not inflict that much damage on the rally…

 

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