Stocks took a tumble to start the new week, and while it wasn't too surprising that investors took some profits, it was a little surprising that all of the gains made in the S&P 500 on Friday, were erased on Monday. I let my skepticism of last week's jobs report be known, and perhaps others had time to digest the data over the weekend? The loss only took away Friday's gains so technically the S&P chart is still fine, but it's testing some support right now that needs to hold.
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I want to apologize for the downtime in the forum recently. We are in the process of upgrading the software and it's kind of a clunky job given how large the forum has become over the last 20 years. It could impact the entire website's processing because there are a lot of processes running during this upgrade. There's a 3rd party involved and my "get it done yesterday" approach isn't going over well with them.
But thanks for your patience. I wish I could tell you when we'll be done, but like Yogi Berra said, it will be over, when it's over.
One issue I am having now is that my PC and server processing resources are being stretched and they are periodically slowing down my PC to a stand still so I am writing this up on my laptop, which means I am going to try to make this quick.
The key yesterday, other than the sell off in stocks, was that yields were still rallying quickly. Ironically, this probably means that the savvy bond market is taking the jobs report very seriously, while I have been skeptical.
The 10-year Treasury yield closed over 4% for the first time in a couple of months. That day in late July the S&P 500 was 200 points lower than it closed yesterday. Is there a correlation? Probably not directly, but one of the two may be out of whack.
Another issue is that The Fed Funds Rate is 4.75% - 5.00%, and the 2-year yield, which the Fed is targeting, is 4.0%. If that yield continues to climb, the Fed would be running out of 0.25% cuts to catch up, meaning perhaps we won't see as many interest cuts from the Fed as we thought.
The 2-year yield is closing in on the 10-year again, both above 4%, and the 30-day yield is still very much inverted to the 10-year yield. That's not really healthy.
But, the Fed is on the stock market's side right now so while I am playing some defense in "Roctober", I am looking for more volatility to set up a good buying opportunity to put more money to work. I generally hate buying near the highs, but sometimes you have to. I'm not there yet.
On Thursday we will get the CPI report, and Friday the PPI report, both of which is expected to reiterate what we've been seeing for months - that inflation is under control.
Admin Note: In the coming weeks we may be working on a server and software upgrade, starting with the forum, that could disrupt the website periodically. I've procrastinated long enough and it's time to get it done. The maintenance could take part or all of the website down at times, but it will not impact Premium Service email and text alerts. I'll keep you posted.
The S&P 500 (C-fund) fell sharply, giving back all of Friday's gains. As well as the S&P 500 has been doing lately, yesterday was the lowest close since September 18. Still, it found support at the 20-day EMA again and as is, there's nothing wrong with this chart. We haven't seen investor sentiment decline too much, so perhaps we need a little more shaking out before we see a low, but if it holds here, it will be tough to argue with the bullish side.
DWCPF (S-fund) was down sharply but you can see here as well that the 20-day EMA brought in some buyers yesterday, which is typical bull market action. If the bears can take that level out, then we'll have a different story.
The I-fund: The EFA was down 0.56% and ACWX was down 0.12%%, and the "ex USA ex China ex Hong Kong Index" was up 0.33%%. You can see the TSP's eventual final daily price and return posted on our site each evening.
BND (Bonds / F-fund) fell sharply for a second day as the bond market embraces Friday's jobs report as a boost to the economy. A strengthening economy means higher yields and rates, and that hurts the prices of bonds, which is why the F-fund has been tumbling recently.
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.html
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 use additional methods and strategies to determine fund positions.
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[TD="width: 311, align: center"] Daily TSP Funds Return
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I want to apologize for the downtime in the forum recently. We are in the process of upgrading the software and it's kind of a clunky job given how large the forum has become over the last 20 years. It could impact the entire website's processing because there are a lot of processes running during this upgrade. There's a 3rd party involved and my "get it done yesterday" approach isn't going over well with them.
But thanks for your patience. I wish I could tell you when we'll be done, but like Yogi Berra said, it will be over, when it's over.One issue I am having now is that my PC and server processing resources are being stretched and they are periodically slowing down my PC to a stand still so I am writing this up on my laptop, which means I am going to try to make this quick.
The key yesterday, other than the sell off in stocks, was that yields were still rallying quickly. Ironically, this probably means that the savvy bond market is taking the jobs report very seriously, while I have been skeptical.
The 10-year Treasury yield closed over 4% for the first time in a couple of months. That day in late July the S&P 500 was 200 points lower than it closed yesterday. Is there a correlation? Probably not directly, but one of the two may be out of whack.
Another issue is that The Fed Funds Rate is 4.75% - 5.00%, and the 2-year yield, which the Fed is targeting, is 4.0%. If that yield continues to climb, the Fed would be running out of 0.25% cuts to catch up, meaning perhaps we won't see as many interest cuts from the Fed as we thought.
The 2-year yield is closing in on the 10-year again, both above 4%, and the 30-day yield is still very much inverted to the 10-year yield. That's not really healthy.
But, the Fed is on the stock market's side right now so while I am playing some defense in "Roctober", I am looking for more volatility to set up a good buying opportunity to put more money to work. I generally hate buying near the highs, but sometimes you have to. I'm not there yet.
On Thursday we will get the CPI report, and Friday the PPI report, both of which is expected to reiterate what we've been seeing for months - that inflation is under control.
Admin Note: In the coming weeks we may be working on a server and software upgrade, starting with the forum, that could disrupt the website periodically. I've procrastinated long enough and it's time to get it done. The maintenance could take part or all of the website down at times, but it will not impact Premium Service email and text alerts. I'll keep you posted.
The S&P 500 (C-fund) fell sharply, giving back all of Friday's gains. As well as the S&P 500 has been doing lately, yesterday was the lowest close since September 18. Still, it found support at the 20-day EMA again and as is, there's nothing wrong with this chart. We haven't seen investor sentiment decline too much, so perhaps we need a little more shaking out before we see a low, but if it holds here, it will be tough to argue with the bullish side.
DWCPF (S-fund) was down sharply but you can see here as well that the 20-day EMA brought in some buyers yesterday, which is typical bull market action. If the bears can take that level out, then we'll have a different story.
The I-fund: The EFA was down 0.56% and ACWX was down 0.12%%, and the "ex USA ex China ex Hong Kong Index" was up 0.33%%. You can see the TSP's eventual final daily price and return posted on our site each evening.
BND (Bonds / F-fund) fell sharply for a second day as the bond market embraces Friday's jobs report as a boost to the economy. A strengthening economy means higher yields and rates, and that hurts the prices of bonds, which is why the F-fund has been tumbling recently.
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.html
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 use additional methods and strategies to determine fund positions.
