Retrogrades & Returns: Markets Beneath a Gemini Sky

WEEKLY MARKET & MACRO REPORT — Week Ended July 18, 2025

U.S. equities broke new ground last week with moderate momentum, driven by bank earnings, mixed inflation data, and continued speculation around Fed policy. As the Sun moves through late Cancer and Mercury retrogrades in Leo, markets are exhibiting characteristics consistent with cautious optimism, paired with undercurrents of narrative revision and strategic positioning.

PLANETARY SYNOPSIS

Markets are navigating a complex backdrop shaped by late-cycle energy as the Sun completes its transit through Cancer, spotlighting protectionist policy, domestic economic resilience, and institutional caution. Mercury retrograde in Leo challenges dominant narratives and calls attention to flawed assumptions or overconfidence in leadership and macro forecasts. Meanwhile, Venus and the Moon in Gemini amplify shifting investor sentiment, driving rapid rotations and favoring adaptable strategies.

Mars in Virgo supports tactical execution, rewarding companies with operational efficiency and balance sheet discipline. Long-range trends are pressured by Pluto retrograde in Aquarius, reflecting underlying transformations in capital allocation, AI governance, and political risk. With Saturn and Neptune both retrograde in Aries, there’s growing skepticism about simplistic growth narratives. Expect markets to continue favoring realism over hype, and fundamentals over forecasts.

MARKET SNAPSHOT

Both the S&P 500 and NASDAQ Composite recorded modest weekly gains of 0.6% and 1.5%, respectively, reclaiming record territory. The Dow Jones Industrial Average, by contrast, slipped 0.1%, held back in part by underperformance in energy and healthcare. Investor sentiment picked up slightly, supported by a robust start to Q2 earnings season and positive retail data. Notably, however, long-dated Treasury yields continued climbing, with the 30-year yield touching 5.07%, its highest intraday mark since before the financial crisis, echoing longer-cycle concerns about structural inflation and debt sustainability.

MACROECONOMIC BACKDROP

A theme of duality—fitting for Venus and the Moon in Gemini—pervaded the inflation outlook. The Consumer Price Index (CPI) showed a year-over-year increase of 2.7% in June, up from 2.4% in May, likely reflecting the pass-through effect of tariff-induced cost pressures. In contrast, the Producer Price Index (PPI) rose just 2.3%, its smallest annual gain since September 2024. This divergence is key: downstream inflation remains sticky, while upstream pressures are fading—a potential signal that margins could narrow unless pricing power persists.

Retail sales surged 0.6% in June, sharply reversing May’s 0.9% drop. But here again, nuance is required. The nominal increase may owe more to rising prices than real volume growth. That said, improved consumer confidence and a stabilization in inflation expectations (per the University of Michigan's sentiment index) hint at resilient household demand, even as the economic expansion ages.

INTEREST RATES & MONETARY POLICY

With Mercury retrograde in Leo, expect volatility in narrative expectations. Traders are increasingly confident the Fed will not cut rates at its July meeting, aligning with language from recent FOMC speakers. However, FedWatch data implies a high probability of two rate cuts before year-end, likely starting in September. The market is betting on an insurance policy response if economic momentum falters post-summer.

Bond markets are already reacting: the yield curve steepened slightly, with the 2s10s spread rising to 55 bps. The rise in long rates, particularly the 30-year at 5.00%, reflects deeper concerns about future inflation and fiscal pressures. Historically, sustained 30-year yields above 5% have coincided with either overheating economies or confidence in long-term growth—this time, the story is murkier, and Saturn in early Aries warns of premature assumptions.

EARNINGS SEASON & SECTOR ROTATION

Q2 earnings season began on a strong note. Large U.S. banks beat expectations, buoyed by a surprising recovery in investment banking revenue. With financials’ earnings estimated to rise 8.6% versus 5.6% for the broader S&P 500, the sector’s relative performance (+0.7% on the week) reflected renewed confidence.

Sector leadership was mixed. Information Technology posted a solid 2.1% gain, while Utilities climbed 1.6%—suggesting some defensive positioning. Healthcare (-2.5%) and Energy (-3.8%) were the laggards, with oil prices sliding 1.4% on weak demand signals. With Mars advancing through Virgo, efficiency and margin resilience will dominate investor screens.

INTERNATIONAL OUTLOOK

Emerging markets rebounded strongly, rising 1.7%, helped by China’s 3.8% weekly gain and Taiwan’s 3.1%. Investors responded to signs of policy support and a modest rebound in manufacturing. Notably, Korea, Mexico, and India posted modest losses, revealing the selective nature of EM enthusiasm.

Developed markets diverged. The MSCI EAFE Index fell 0.3%, dragged down by Europe (-0.5%). Spain (+0.2%) and Italy (+0.2%) were rare bright spots. Despite stronger YTD returns in the region (Spain +43.2%, Germany +35.9%), recent price action suggests consolidation. Jupiter’s presence in Cancer, a water sign, favors internal strength and domestic resilience—an important theme as global decoupling continues.

The U.S. dollar extended its winning streak, rising for a third straight week. But it remains 9% below its January high, with year-to-date losses concentrated in Q1. Currency markets appear range-bound for now, with no central bank showing a decisive edge. Uranus in early Gemini could soon trigger unexpected FX volatility, especially if macro data diverge from consensus.

FIXED INCOME & CREDIT

Bond returns were flat-to-modest across the board. The U.S. Aggregate Index returned 0.0% on the week, though convertibles (+1.8%) and corporates (+0.3%) showed strength. Municipals (-1.1%) underperformed amid rising yields and weak demand.

Credit quality remains in focus. Lower-rated segments, especially high-yield (+0.2%) and bank loans (+0.2%), continue to benefit from risk-on sentiment, although the slow creep in long-term rates could challenge this if refinancing pressures grow.

FUND FLOWS & INVESTOR POSITIONING

Fund flow data to June 30 paint a vivid picture of rotation. Taxable bond funds received $51.1B in net inflows during June and $442B over the trailing 12 months. In contrast, U.S. equity funds saw $37B in outflows in June, despite positive YTD market performance. Investors are buying bonds, not stocks.

Category winners included Intermediate Core Bond (+$20.1B) and Foreign Large Blend (+$8.8B), while Large Growth (-$12B) and Mid-Cap Growth (-$3.7B) were notable laggards. Allocations to digital assets and commodities-focused funds also rose—likely a reflection of persistent macro hedging themes under a volatile Venus in Gemini.

ASTRO-MARKET THEMES

With the Sun in late Cancer and Mercury retrograde in Leo, the market is balancing sentimental memory with forward-looking confidence. Cancer’s association with protectionism and home bias mirrors investor hesitation to fully embrace risk, even as returns trend higher. Venus in Gemini, alongside a Gemini Moon, speaks to fluid preferences—watch for rotating sector leadership and fickle sentiment.

The presence of Mars in Virgo increases focus on efficiency, compliance, and operational detail—benefiting firms that excel in execution. At the same time, Pluto retrograde in Aquarius continues to exert structural pressure, especially around regulation, AI, and decentralization trends.

Neptune’s retrograde in Aries can obscure the sense of direction, while Saturn retrograde in Aries cautions against premature confidence in policy outcomes. This retrograde-heavy configuration supports a “prove-it” regime for risk assets: momentum without fundamentals is unlikely to hold.

OUTLOOK

The week ahead brings data on existing and new home sales, durable goods orders, and unemployment claims. These releases will test the strength of domestic demand. In astrology, Mercury’s retrograde motion calls for clarity in communication—markets will be quick to punish any signal perceived as ambiguous.

From a macro-technical perspective, equities remain in an uptrend, but stretched valuations and bond market signals warrant caution. If Jupiter in Cancer continues to elevate themes of protection and rebalancing, a rotation into defensive sectors and fixed income may gain steam.

Investors should prepare for potential volatility spikes as summer liquidity wanes and Fed expectations adjust. Expect surprises. Uranus in early Gemini is just getting started.

—Market Watching the Moon