Stocks rally while the dollar tumbles
Stocks moved higher again last week despite some mixed economic data. Whether it is the upcoming elections, the falling dollar, or the prospects of QE2, investors continue to embrace the rally in the stock market.
The TSP funds all finished the week in positive territory. The C-fund was up 1.71%, the S-fund was up 1.64%, and the I-fund jumped 2.75% as the dollar’s slide continues. Bonds (F-fund) were up 0.64% and the G-fund added 0.04%.
You can see that the all of the funds are also up for the month of October, and for 2010.
After a strong September, the rally continues into October as we head into the home stretch of the mid-term elections. There is a tendency to see stocks rally both before, and after the mid-term elections. In 19 of the last 22 mid-term elections, the market was up 90-days after Election Day, including 15 of the last 16 since WWII ended with an average return of 7.8% (during those 90-days.)
Whether the election has anything to do with what is happening with the market now, I am not sure, but the recent rally certainly coincides with the slide we have seen in the dollar since late August.
Charts provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The market is in a very good position right now as any good news is being rewarded, but any bad economic news is also greeted with excitement as it increases the chances that the Federal Reserve with push quantitative easing on us (QE 2, as they are calling it). That would increase the money supply making it easier for banks to loan money. In the short-term, it would likely help the stock market, but I think it just prolongs the inevitable. I’ll let you fill in the blank.
Good luck, and thanks for reading. We will be back here next week with another TSP Wrap Up.
Tom Crowley
www.tsptalk.com
Weekly Wrap-Ups Archive
Stocks moved higher again last week despite some mixed economic data. Whether it is the upcoming elections, the falling dollar, or the prospects of QE2, investors continue to embrace the rally in the stock market.
The TSP funds all finished the week in positive territory. The C-fund was up 1.71%, the S-fund was up 1.64%, and the I-fund jumped 2.75% as the dollar’s slide continues. Bonds (F-fund) were up 0.64% and the G-fund added 0.04%.
You can see that the all of the funds are also up for the month of October, and for 2010.
After a strong September, the rally continues into October as we head into the home stretch of the mid-term elections. There is a tendency to see stocks rally both before, and after the mid-term elections. In 19 of the last 22 mid-term elections, the market was up 90-days after Election Day, including 15 of the last 16 since WWII ended with an average return of 7.8% (during those 90-days.)
Whether the election has anything to do with what is happening with the market now, I am not sure, but the recent rally certainly coincides with the slide we have seen in the dollar since late August.
Charts provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The market is in a very good position right now as any good news is being rewarded, but any bad economic news is also greeted with excitement as it increases the chances that the Federal Reserve with push quantitative easing on us (QE 2, as they are calling it). That would increase the money supply making it easier for banks to loan money. In the short-term, it would likely help the stock market, but I think it just prolongs the inevitable. I’ll let you fill in the blank.
Good luck, and thanks for reading. We will be back here next week with another TSP Wrap Up.
Tom Crowley
www.tsptalk.com
Weekly Wrap-Ups Archive
