Stocks opened lower on Tuesday but it didn't take long for the dip buyers to show up as the indices closed well off their lows, and the Nasdaq ended the day positive again. Once again big tech led the way, and the small caps lagged with the 10-year yield moving higher. The strength in the dollar continues to put pressure on the I-fund. The F-fund was flat with yields mixed.
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Earnings are coming in and we are seeing a mixed bag. Starbucks just warned for the 4th quarter and was down after hours. Tesla will be the first of the Magnificent 7 stocks to report, as they will release earnings after the bell today.
McDonald's, one of the Dow components, was down about 10% after hours yesterday after an E. Coli outbreak was announced in the Mountain West states. There have been ten hospitalizations and one death reported so far. If you live in that area you might want to hold the onions, which seem to be the culprit. Of course Donald Trump worked at McD's the other day for a photo-opp so the timing is interesting. I won't speculate out loud.
This could cause the Dow to be heavy today.
One of the most interesting aspects of this market is that the Fed gave us one of its biggest non-crisis interest rate cuts last month and since then the 10-year Treasury Yield has basically gone straight up. Is this because of the election? Both parties are promising all kinds of giveaways and tax cuts if elected, and the fact is that is inflationary. Of course promises and actions are two different things, but one thing the market does like most in DC is gridlock. On the other hand, if one party sweeps the White House, the Senate and the House of Representatives, then they can get more done and that usually means more spending. So that may explain the dichotomy between these two.
Gold is soaring to new highs and Silver hit a 12 year high yesterday. What is this telling us, anything? It's likely related to inflation / election concerns. There's also a lot of buying in the metals from Central Banks around the world, but why they are buying, I'm not sure, but if you Google it we will probably get some good theories.
Oil also rallied sharply yesterday, closing near $72 but the chart doesn't look too bullish. It looks like a bearish head and shoulders pattern so I would guess that we will see 68 and lower again in the coming weeks.
Updated Admin Note: I am trying to make this quick today as I am now in the process of moving our forum and the entire website to new servers and we are at the point where we are testing the new servers before going live. I am concerned about some potential technical issues that we probably will see during the shift, so your patience is appreciated. However, it will not impact Premium Service email and text alerts. I'll keep you posted.
The S&P 500 (C-fund) was down a few ticks yesterday, but closed off its lows. It did remain in the dreaded rising wedge pattern, and the longer it hangs out in there, the more likely it would be for that formation to do what it tends to do -- break down. It could buck that tendency. Just be careful until this can prove it can close above that wedge for more than a couple of days.
DWCPF (S-fund) has had a good month but it has been lagging recently and it is basically letting the C-fund catch up as the leading fund return for the month. As I mentioned yesterday, the 2180 area looks like the key support level that must hold to avoid a more meaningful decline.
The I-fund: The EFA tracking ETF was down 0.57% yesterday, ACWX was down 0.45%, and the "ex USA ex China ex Hong Kong Index" was down 0.77%. The final price should be somewhere in between those. The guessing game for the daily I-fund price may go on through the end of the year as the TSP transitions into the new tracking index, which is supposed to eventually mimic the "ex USA ex China ex Hong Kong Index." You can see the TSP's eventual final daily price and return posted on our site each evening.
The EFA chart is needing some help at the 100-day EMA.
BND (bonds / F-fund) was up a bit despite the move higher in the 10-year yield. Interestingly, the 2 year thru the 10-year yields were down, while the shorter-term 1, 3, and 6-month yields were down, but the 30-year was also down, and that helped the BND stay positive.
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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Earnings are coming in and we are seeing a mixed bag. Starbucks just warned for the 4th quarter and was down after hours. Tesla will be the first of the Magnificent 7 stocks to report, as they will release earnings after the bell today.
McDonald's, one of the Dow components, was down about 10% after hours yesterday after an E. Coli outbreak was announced in the Mountain West states. There have been ten hospitalizations and one death reported so far. If you live in that area you might want to hold the onions, which seem to be the culprit. Of course Donald Trump worked at McD's the other day for a photo-opp so the timing is interesting. I won't speculate out loud.
This could cause the Dow to be heavy today.One of the most interesting aspects of this market is that the Fed gave us one of its biggest non-crisis interest rate cuts last month and since then the 10-year Treasury Yield has basically gone straight up. Is this because of the election? Both parties are promising all kinds of giveaways and tax cuts if elected, and the fact is that is inflationary. Of course promises and actions are two different things, but one thing the market does like most in DC is gridlock. On the other hand, if one party sweeps the White House, the Senate and the House of Representatives, then they can get more done and that usually means more spending. So that may explain the dichotomy between these two.
Gold is soaring to new highs and Silver hit a 12 year high yesterday. What is this telling us, anything? It's likely related to inflation / election concerns. There's also a lot of buying in the metals from Central Banks around the world, but why they are buying, I'm not sure, but if you Google it we will probably get some good theories.
Oil also rallied sharply yesterday, closing near $72 but the chart doesn't look too bullish. It looks like a bearish head and shoulders pattern so I would guess that we will see 68 and lower again in the coming weeks.
Updated Admin Note: I am trying to make this quick today as I am now in the process of moving our forum and the entire website to new servers and we are at the point where we are testing the new servers before going live. I am concerned about some potential technical issues that we probably will see during the shift, so your patience is appreciated. However, it will not impact Premium Service email and text alerts. I'll keep you posted.
The S&P 500 (C-fund) was down a few ticks yesterday, but closed off its lows. It did remain in the dreaded rising wedge pattern, and the longer it hangs out in there, the more likely it would be for that formation to do what it tends to do -- break down. It could buck that tendency. Just be careful until this can prove it can close above that wedge for more than a couple of days.
DWCPF (S-fund) has had a good month but it has been lagging recently and it is basically letting the C-fund catch up as the leading fund return for the month. As I mentioned yesterday, the 2180 area looks like the key support level that must hold to avoid a more meaningful decline.
The I-fund: The EFA tracking ETF was down 0.57% yesterday, ACWX was down 0.45%, and the "ex USA ex China ex Hong Kong Index" was down 0.77%. The final price should be somewhere in between those. The guessing game for the daily I-fund price may go on through the end of the year as the TSP transitions into the new tracking index, which is supposed to eventually mimic the "ex USA ex China ex Hong Kong Index." You can see the TSP's eventual final daily price and return posted on our site each evening.
The EFA chart is needing some help at the 100-day EMA.
BND (bonds / F-fund) was up a bit despite the move higher in the 10-year yield. Interestingly, the 2 year thru the 10-year yields were down, while the shorter-term 1, 3, and 6-month yields were down, but the 30-year was also down, and that helped the BND stay positive.
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.
