C-fund

[TommyIV]

The S&P 500 gave up its gains and moved into negative territory after the TSP trading deadline. Consider this good for those who bought in today, bad for those who sold today.

The index peaked this morning just over +1% before giving back gains. At the 12PM ET trading deadline the S&P 500 was up +0.46%. That turned out to be in the midst of a downturn.

The S&P 500 is currently (2:20PM ET) down -0.90% and its momentum is still down.

 

[joblin20]

I am really hoping this pans out well.

 

[TommyIV]

This is a C-fund thread but this is a post about the C and S-fund.

This week we were hit with the major earnings of the tech giants Apple, Alphabet, Amazon, Meta Platforms, and Microsoft. Earnings were a disappointment for the most part; with the clear exception of Apple. Although we didn't see the market tank as a result, and actually the market will finish this week with impressive gains, it was a turbulent mess at some points. But what struck me was a headline out the of the Wall Street Journal:

Tech Boom Ends as Companies From Amazon to Meta Adjust to Turbulent Times

The article talks about the current earnings reports of these tech giants but of also future problems for they will face in time with the shape of the economy.

Tech companies that enjoyed strong growth in the early days of the pandemic are feeling the effects of a new reality of high inflation, rising interest rates, currency headwinds and other issues on their income statements.

Good read, but the title alone makes you question the future of the heavily tech weighted S&P 500 or the C-fund. Below is an article from last year but it highlights the risk of index having such a tech heavy backbone.

Investors Know They Own Too Much Tech. This Analysis Shows That It’s Worse Than They Think.

If there is a change in sentiment away from tech, it will take 42 percent of the market with it.

This is more food for thought than a declaration, but this should have us looking at the S-fund for another access to U.S. stocks without the heavy connection to tech companies while they face challenges. Only 17% of the DWCPF index (S-fund) is made up of tech companies.

Economic challenges that are plaguing the tech companies also affect other sectors. But a lot of eggs are put into the one sector that we expect to always outperform.

 

[tsptalk]

The S&P 500 (C-fund) has fallen slightly below its 200-day simple moving average (orange) but may be is trying to hold at its 200-day EMA (exponential average.)

The longer term charts look vulnerable but this OK for now.

 

[tsptalk]

 

[tsptalk]

 

[TommyIV]

This house of cards is getting tall. I'm out of IFTs this month but I wouldn't be able to talk myself into buying the C-fund today looking at this chart.

Does anyone else feel differently? I could see how a potential buyer may be comforted by the momentum.

 

[tsptalk]

Tom Lee still seems to think small caps can move 40% higher in this environment.

He thinks large caps (C-fund) would do well, as well, but thinks lower rates will boost the Russell big time.

Does anyone else feel differently?

 

[FAAM]

I hear you - your spinning-top high point, and hoping your fears don't come to pass right now - that the spinning top about Aug. 15th & others help assuage such negative inclinations.
... Also, I waded more into the pond this Monday with IFT, reducing from about 50% in G-fund to about 25%... fingers crossed on good vibes in news overall with DNC this week, the current FED situation, that POTUS election years with Incumbent running tend more positive for stocks (& thinking the VP now running is roughly close to an incumbent situation). Fingers crossed!