The new month brings new highs in stocks. All of the major stock indices (S&P 500, DOW, NASDAQ, RUSSELL 2000) reach new record highs Friday. What made that particularly peculiar was that the day started with a jobs report that was quite short of expectations. 245,000 jobs were added last month while economists surveys expected an addition of 440,000 jobs. Another record broken Friday was the number of reported new cases of the corona virus along with the number of reported deaths from the virus in a single day record. Yet with that in the air the appetite for stocks remained strong.
Momentum played a large role in the extension of stock prices this week. November's action has produced the fear of missing out (FOMO) mentality investors. The increasing potential of a vaccine to the public as soon as next year has been a driving force. It allows an investors to look past the economy's current state and put their money on tomorrow when all is well again. Talks towards more economic stimulus out of congress also started up again; not anything new but always serves as the carrot in front of the horse's face. In all the investor can rest easy in stocks knowing that the virus is on its way out and the government will be there to clean up the mess left behind.
The dark side is what we've seen time and time again of markets getting overextending to the point of becoming unreasonable and too risky for your life's savings. Best case scenarios are getting priced in too early and you optimism can turn real quickly. But if you can stomach the potential loss, then catch the wave.
Bonds took a the only loss for the week. The appetite for stocks over turned the usual appetite for bonds following disappointing economic data. The S-fund led the TSP funds with a gain of 2.04% for the week.
Here are the weekly, monthly, and annual TSP fund returns for the week ending December 4:
The SPY (S&P 500 / C-fund) broke a resistance trend line on Friday that had kept the week's highs at bay up to that point. The week started with a loss on Monday but its a mid-day reversal off the lows began the climb for the rest of the week. Closing at an all time high the C-fund was up 1.72% for the week.
The Dow Completion Index (S-fund) pulled back from its steady climb that lasted all of November. The two day pull back ended Wednesday and the index jumped Thursday and Friday. The index reached an all time high Friday but the highs were even with the previous support line of November. The S-fund led the TSP funds for the week with a gain of 2.04%.
EFA (EAFE Index / I-fund) had an impressive pull back on Monday but action continued Tuesday. The support that failed Monday held once again Tuesday and for the rest of the week. The I-fund also reached new highs to end the week. The I-fund gained 1.05% for the week.
BND (Bonds / F-fund) was the lone loser of the TSP funds with a loss of 0.4% for the week. The fund lost 0.25% on Friday alone despite an underperforming jobs report. Its typical to see an increased demand for bonds when the economy shows signs of slowed growth. Bonds started the week with gains slid to its 50-day EMA where the surrounding price held as an area of support twice (Wednesday and Friday). It may hold true that the demand for stock is overshadowing investors typical behavior.
Good luck and thanks for reading. We will be back here next week with another TSP Wrap Up. You can read our daily market commentary at the Market Comments page. If you need more help deciding what to do with your account, perhaps one of our Premium Services can help.
Thomas A Crowley
www.tsptalk.com
Weekly Wrap-Ups Archive
Facebook | Twitter
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.
Momentum played a large role in the extension of stock prices this week. November's action has produced the fear of missing out (FOMO) mentality investors. The increasing potential of a vaccine to the public as soon as next year has been a driving force. It allows an investors to look past the economy's current state and put their money on tomorrow when all is well again. Talks towards more economic stimulus out of congress also started up again; not anything new but always serves as the carrot in front of the horse's face. In all the investor can rest easy in stocks knowing that the virus is on its way out and the government will be there to clean up the mess left behind.
The dark side is what we've seen time and time again of markets getting overextending to the point of becoming unreasonable and too risky for your life's savings. Best case scenarios are getting priced in too early and you optimism can turn real quickly. But if you can stomach the potential loss, then catch the wave.
Bonds took a the only loss for the week. The appetite for stocks over turned the usual appetite for bonds following disappointing economic data. The S-fund led the TSP funds with a gain of 2.04% for the week.
Here are the weekly, monthly, and annual TSP fund returns for the week ending December 4:
The SPY (S&P 500 / C-fund) broke a resistance trend line on Friday that had kept the week's highs at bay up to that point. The week started with a loss on Monday but its a mid-day reversal off the lows began the climb for the rest of the week. Closing at an all time high the C-fund was up 1.72% for the week.
The Dow Completion Index (S-fund) pulled back from its steady climb that lasted all of November. The two day pull back ended Wednesday and the index jumped Thursday and Friday. The index reached an all time high Friday but the highs were even with the previous support line of November. The S-fund led the TSP funds for the week with a gain of 2.04%.
EFA (EAFE Index / I-fund) had an impressive pull back on Monday but action continued Tuesday. The support that failed Monday held once again Tuesday and for the rest of the week. The I-fund also reached new highs to end the week. The I-fund gained 1.05% for the week.
BND (Bonds / F-fund) was the lone loser of the TSP funds with a loss of 0.4% for the week. The fund lost 0.25% on Friday alone despite an underperforming jobs report. Its typical to see an increased demand for bonds when the economy shows signs of slowed growth. Bonds started the week with gains slid to its 50-day EMA where the surrounding price held as an area of support twice (Wednesday and Friday). It may hold true that the demand for stock is overshadowing investors typical behavior.
Good luck and thanks for reading. We will be back here next week with another TSP Wrap Up. You can read our daily market commentary at the Market Comments page. If you need more help deciding what to do with your account, perhaps one of our Premium Services can help.
Thomas A Crowley
www.tsptalk.com
Weekly Wrap-Ups Archive
Facebook | Twitter
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.
