(5 October 2021) If Shakespeare had lived in Washington, DC, he might have written, ‘All the world’s a stage, and politicians are merely players in it.’  Fortunately for us, he didn’t but we are nonetheless stuck with the predictable melodrama of US politics.  And so the debt ceiling negotiations are again taking center stage as the Democrats and Republicans are forced to find ways to compromise without risking a catastrophic debt default by the October 18 deadline.

While nobody really expects a US government default to happen, financial markets have become volatile in recent days as the debt ceiling talks are now inextricably intertwined with negotiations involving the two Biden infrastructure bills.   Markets have largely discounted the fiscal stimulus from these bills so there is some downside risk in the event that these bills are not passed.  Without these major spending bills, the post-pandemic recovery would be more fragile and thus vulnerable to market disappointment.

We can see the current political tension in Washington in the US horoscope.   The government is traditionally symbolized by the Sun so any tense aspects involving malefic planets (especially Mars and Saturn) will tend to coincide with difficult situations.  This week there is a fairly rare triple conjunction of Mercury, Sun and Mars which will form a square alignment with natal Sun (22 Gemini).  This Mars-centered configuration suggests significant tension with government and leaders and is one very good reason why the debt ceiling talks are unlikely to resolve quickly.

Resolution becomes more likely only after the Mercury-Sun-Mars conjunction has passed exact on Saturday, October 8.  Until then, all three planets will be sources of stress on the Sun (government).  Based on this factor alone, markets are therefore more likely to remain volatile for the rest of this week, although other offsetting factors could remain significant.

The other planet to watch in this respect is Saturn.  Saturn is due to station direct at 12 Capricorn on Sunday, October 10 while in an exact alignment with natal Venus in the USA chart. Venus symbolizes harmony and economic well-being while Saturn represents disruption and disappointment.  Together, these planets form a potentially toxic brew of dissension which makes any quick resolution to the debt ceiling talks unlikely in the near term.  The outlook may improve after October 10, although its negative effects could linger a while longer.

Weekly Market Forecast

While it is a very remote chance, a US debt default would likely cause a stock market crash.  This is one very obvious reason why it will never happen.   Nonetheless, the fear of a default could well spook markets further in the near term.

The Sun-Mars conjunction in sidereal Virgo with retrograde Mercury backing into a triple conjunction suggests volatility is more likely to persist than to subside.  But while the US may be locked in the uncertainty of Saturn and Mars here, optimism is more likely to emerge after the Jupiter direct station on October 18.