07/16/25
Stocks were mixed yesterday as big tech led the Nasdaq higher, but the broader market actually had an awful day. The CPI was warmer than expected and yields and the dollar rallied sharply on this new data. The S&P 500 (C-fund) had a modest loss while small caps and the I-fund were hit hard. This shift is coming right on cue as the seasonality calendar turns more bearish.
(The most current commentary is always posted here: www.tsptalk.com/comments.php)
The CPI (Consumer Prices) came in a little hotter than expected and that was cause for some on Wall Street to say the tariffs are causing inflation, and while that may end up being true, it's too early to say at this point. Prices do go up and down and they are still trending lower, despite a pop in June. While oil is not part of the Core CPI because of its volatility, the price of oil did jump wildly in June because of the turmoil in the Middle east, and higher oil prices will impact other prices. Oil is now down $12 a barrel since the June high.
Today's PPI might confirm the stiffer prices, or contradict it, but either way it's too early to say if the trend is changing.
Reality and perception may not agree, but both can move the market and yields and the dollar did rally again on the data, and that was a big reason why small caps and the I-fund lagged yesterday. The bond market's negative reaction was a little more concerning than the stock market's. As I always say, the level of the 10-year yield isn't as concerning because the market eventually adjusts to the new yield, but while it is moving you can see the stock market get shaken up and try to price in the new yields, especially if it is moving quickly, and it and the dollar have been moving sharply higher this month.
The market breadth was heavily negative yesterday with decliners leading advancers on the NYSE by more than 4 to 1. The Nasdaq breadth was a little less severe, especially the share volume, and that was because of some big gains in large cap tech, as you'll see in a minute.
The S&P 500 (C-fund) fell down to the bottom of the blue trading channel. Depending on how thick your crayon is, or how precise you draw the angle of the support lines, it's pretty close to breaking that support and will likely do so if today is not a positive day. It wouldn't be the end of the world since there is plenty of support just a little further down.
The PMO Indicator is in danger of falling below its average again. It doesn't always mean trouble, but all major declines off of market tops will eventually do this.
Nvidia, one of the largest companies on the planet, is up 55% since the April lows. That sounds a little crazy that, for its size, it can still go up that quickly. Because it has such a large market cap, yesterday's 4% gain helped the Nasdaq to a new all-time high, and it also helped mask some of the weakness in the broader market.
That is why the S&P 500 was down just 0.40% while the Equal Weighted S&P 500 (RSP - same 500 stocks in S&P 500) was down 1.4%, the Transportation Index was down 1.6%, the Russell 2000 lost 2%, and the DWCPF (our S-fund) lost 1.5%, so stocks performed poorly yesterday but Nvidia helped keep it more of a stealth sell off.
Again, we get PPI (Producer Prices) report today so bonds, the dollar, and stocks are bracing for another reaction to another wave of inflation data.
DWCPF / S-fund continues to show high beta moves - bigger gains and bigger losses than the S&P 500. On Monday it was a bigger gain but not only was yesterday's loss a much bigger loss than the S&P 500, but it also created a negative outside reversal day suggesting a period of more weakness. It could bounce back today on the PPI data for all we know, but that negative outside reversal almost always means something changed.
ACWX (I-fund) posted a similar formation so the analysis is a ditto, and the recent gains in the dollar is a good reason for this shift. Do we need to see a test at the red support line or 50-day average before this chart resumes higher? I'm OK with that. I missed this fund's rally all year and I'd like another opportunity.
BND (bonds / F-fund) also created a negative outside reversal day and it is quickly testing the 50-day EMA.
Thanks so much for reading! We'll see you back here tomorrow.
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.
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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 were mixed yesterday as big tech led the Nasdaq higher, but the broader market actually had an awful day. The CPI was warmer than expected and yields and the dollar rallied sharply on this new data. The S&P 500 (C-fund) had a modest loss while small caps and the I-fund were hit hard. This shift is coming right on cue as the seasonality calendar turns more bearish.
(The most current commentary is always posted here: www.tsptalk.com/comments.php)
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The CPI (Consumer Prices) came in a little hotter than expected and that was cause for some on Wall Street to say the tariffs are causing inflation, and while that may end up being true, it's too early to say at this point. Prices do go up and down and they are still trending lower, despite a pop in June. While oil is not part of the Core CPI because of its volatility, the price of oil did jump wildly in June because of the turmoil in the Middle east, and higher oil prices will impact other prices. Oil is now down $12 a barrel since the June high.
Today's PPI might confirm the stiffer prices, or contradict it, but either way it's too early to say if the trend is changing.
Reality and perception may not agree, but both can move the market and yields and the dollar did rally again on the data, and that was a big reason why small caps and the I-fund lagged yesterday. The bond market's negative reaction was a little more concerning than the stock market's. As I always say, the level of the 10-year yield isn't as concerning because the market eventually adjusts to the new yield, but while it is moving you can see the stock market get shaken up and try to price in the new yields, especially if it is moving quickly, and it and the dollar have been moving sharply higher this month.
The market breadth was heavily negative yesterday with decliners leading advancers on the NYSE by more than 4 to 1. The Nasdaq breadth was a little less severe, especially the share volume, and that was because of some big gains in large cap tech, as you'll see in a minute.
The S&P 500 (C-fund) fell down to the bottom of the blue trading channel. Depending on how thick your crayon is, or how precise you draw the angle of the support lines, it's pretty close to breaking that support and will likely do so if today is not a positive day. It wouldn't be the end of the world since there is plenty of support just a little further down.
The PMO Indicator is in danger of falling below its average again. It doesn't always mean trouble, but all major declines off of market tops will eventually do this.
Nvidia, one of the largest companies on the planet, is up 55% since the April lows. That sounds a little crazy that, for its size, it can still go up that quickly. Because it has such a large market cap, yesterday's 4% gain helped the Nasdaq to a new all-time high, and it also helped mask some of the weakness in the broader market.
That is why the S&P 500 was down just 0.40% while the Equal Weighted S&P 500 (RSP - same 500 stocks in S&P 500) was down 1.4%, the Transportation Index was down 1.6%, the Russell 2000 lost 2%, and the DWCPF (our S-fund) lost 1.5%, so stocks performed poorly yesterday but Nvidia helped keep it more of a stealth sell off.
Again, we get PPI (Producer Prices) report today so bonds, the dollar, and stocks are bracing for another reaction to another wave of inflation data.
DWCPF / S-fund continues to show high beta moves - bigger gains and bigger losses than the S&P 500. On Monday it was a bigger gain but not only was yesterday's loss a much bigger loss than the S&P 500, but it also created a negative outside reversal day suggesting a period of more weakness. It could bounce back today on the PPI data for all we know, but that negative outside reversal almost always means something changed.
ACWX (I-fund) posted a similar formation so the analysis is a ditto, and the recent gains in the dollar is a good reason for this shift. Do we need to see a test at the red support line or 50-day average before this chart resumes higher? I'm OK with that. I missed this fund's rally all year and I'd like another opportunity.
BND (bonds / F-fund) also created a negative outside reversal day and it is quickly testing the 50-day EMA.
Thanks so much for reading! We'll see you back here tomorrow.
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.
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