10/10/25
Stocks pulled back on Thursday as the market starts to get a little choppy this week, which is fine after the recent rally. The bears were still not able to put a lot of pressure on as the indices did come back to close off their lows, especially in the Nasdaq where the dip buyers were aggressive. The dollar continues its move higher giving the I-fund some trouble again, and yields were up holding back small caps and the F-fund.
While we saw the S&P 500 (C-fund) come back from its worst levels of the day yesterday and post a very modest loss, the Equal Weighted S&P 500 (same 500 stocks) was down quite sharply, meaning the top tech stocks are stealing the show again and perhaps masking some internal weakness. The good news for TSP'ers, the C-fund doesn't pay the Equal Weighted return, but rather includes big tech.
Equal Weighted S&P 500 ETF
And here is that Nasdaq 100, the top 100 tech stocks in the Nasdaq, which was barely down yesterday.
Ironically large cap stocks are more impacted by a strong dollar than small caps because of the global market reach of larger companies, but yesterday small caps lagged the large caps, however it was the I-fund taking the biggest hit with that 0.68% gain the dollar. That is to be expected although, as you'll see in the ACWX (I-fund) chart in the bottom section, the recent rally in the dollar has only just started making a dent in that top performing TSP fund.
Yields were up yesterday after the positive reversal on Wednesday, and while we see a clear down trend with resistance still holding, there is now a bull flag formed, which may open the door to a possible breakout higher. With credit market showing some modest deterioration recently, a breakout in the 10-year Yield could be a deal breaker for the rally in stocks. Right now it's fine but 4.2%, or worse 4.3%, could trigger a pullback or worse in the short-term for stocks.
But the Fed is now cutting interest rates so any pullback in stocks will likely be just a healthy cleansing exercise. There is a 94% probability that they will cut again at the meeting later this month. I expect new highs into the end of the year, but some kind of hiccup in the interim.
From tsp.gov: Holiday Closing - Some financial markets will be closed on Monday, October 13, in observance of Columbus Day. The Thrift Savings Plan will also be closed. Transactions that would have been processed Monday night (October 13) will be processed Tuesday night (October 14) at Tuesday's closing share prices.
The DWCPF (S-fund) is still hanging around the all-time highs but you can see that it is struggling to close above that red horizontal line, despite several intraday moves above it.
ACWX (I-fund) took a big hit yesterday as the strength in the dollar is finally weighing on it. I've been looking for an opportunity to buy a pullback here, but the recent strength in the dollar has shied me away from buying in recent weeks.
BND (bonds / F-fund) was down yesterday as it continues to lingers between the narrowing support and resistance lines. It looks fairly similar to the consolidation in August, which resulted in another leg higher, but as we talked about up top, the 10-year yield is threatening to breakout to the upside, which would be bearish for bonds and the F-fund.
Thanks so much for reading! Have a great weekend!
Tom Crowley
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
Questions, comments, or issues with today's commentary? We can discuss it in the Forum.
Daily Market Commentary Archives
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Posted daily at www.tsptalk.com/comments.php
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We may use additional methods and strategies to determine fund positions.
Stocks pulled back on Thursday as the market starts to get a little choppy this week, which is fine after the recent rally. The bears were still not able to put a lot of pressure on as the indices did come back to close off their lows, especially in the Nasdaq where the dip buyers were aggressive. The dollar continues its move higher giving the I-fund some trouble again, and yields were up holding back small caps and the F-fund.
| Daily TSP Funds Return
More returns |
While we saw the S&P 500 (C-fund) come back from its worst levels of the day yesterday and post a very modest loss, the Equal Weighted S&P 500 (same 500 stocks) was down quite sharply, meaning the top tech stocks are stealing the show again and perhaps masking some internal weakness. The good news for TSP'ers, the C-fund doesn't pay the Equal Weighted return, but rather includes big tech.
Equal Weighted S&P 500 ETF
And here is that Nasdaq 100, the top 100 tech stocks in the Nasdaq, which was barely down yesterday.
Ironically large cap stocks are more impacted by a strong dollar than small caps because of the global market reach of larger companies, but yesterday small caps lagged the large caps, however it was the I-fund taking the biggest hit with that 0.68% gain the dollar. That is to be expected although, as you'll see in the ACWX (I-fund) chart in the bottom section, the recent rally in the dollar has only just started making a dent in that top performing TSP fund.
Yields were up yesterday after the positive reversal on Wednesday, and while we see a clear down trend with resistance still holding, there is now a bull flag formed, which may open the door to a possible breakout higher. With credit market showing some modest deterioration recently, a breakout in the 10-year Yield could be a deal breaker for the rally in stocks. Right now it's fine but 4.2%, or worse 4.3%, could trigger a pullback or worse in the short-term for stocks.
But the Fed is now cutting interest rates so any pullback in stocks will likely be just a healthy cleansing exercise. There is a 94% probability that they will cut again at the meeting later this month. I expect new highs into the end of the year, but some kind of hiccup in the interim.
From tsp.gov: Holiday Closing - Some financial markets will be closed on Monday, October 13, in observance of Columbus Day. The Thrift Savings Plan will also be closed. Transactions that would have been processed Monday night (October 13) will be processed Tuesday night (October 14) at Tuesday's closing share prices.
The DWCPF (S-fund) is still hanging around the all-time highs but you can see that it is struggling to close above that red horizontal line, despite several intraday moves above it.
ACWX (I-fund) took a big hit yesterday as the strength in the dollar is finally weighing on it. I've been looking for an opportunity to buy a pullback here, but the recent strength in the dollar has shied me away from buying in recent weeks.
BND (bonds / F-fund) was down yesterday as it continues to lingers between the narrowing support and resistance lines. It looks fairly similar to the consolidation in August, which resulted in another leg higher, but as we talked about up top, the 10-year yield is threatening to breakout to the upside, which would be bearish for bonds and the F-fund.
Thanks so much for reading! Have a great weekend!
Tom Crowley
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
Questions, comments, or issues with today's commentary? We can discuss it in the Forum.
Daily Market Commentary Archives
For more info our other premium services, please go here... www.tsptalk.com/premiums.php
To get weekly or daily notifications when we post new commentary, sign up HERE.
Posted daily at www.tsptalk.com/comments.php
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We may use additional methods and strategies to determine fund positions.
