A reversal from the previous week's action put U.S. indices at new all time highs. Numerous economic reports covering the labor market, inflation, and consumer spending gave investors the reassurance that the economy was on the right track. Inflation has been the hot topic and been compared to the inflation woes of the 1970s. But the reality is we are nowhere near the inflation levels of those times and rather it is a side effect of an economy booming after being shutdown.
Coming off a down week caused by a more hawkish Fed, there was a clear buying opportunity for anyone who didn't buy the run away inflation narrative. But the conditions in the market have now changed since the indices have climbed to new all time highs. Buying opportunities have turned into FOMO (Fear Of Missing Out). But there has been times in the months behind us where the market showed us it can rise longer than seems reasonable. Moving forward, is the path of least resistance still higher?
Bonds were down and the F-fund fell 0.41%. The F-fund chart doesn't have any major technical damage but rather was overshadowed by the action in stocks.
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Here are the weekly, monthly, and annual TSP fund returns for the week ending June 25:
The SPY (S&P 500 / C-fund) opened higher Monday and ended the day above the 20-day EMA. The growth slowed its pace but by Thursday the index had produced a new all time high and added to it Friday making it through rising resistance. The C-fund was up 2.76% for the week.
The Dow Completion Index (S-fund) had the steepest recovery of the stock funds this week made it into a new record high for the first time since April. The index has seen spikes like this in the last months and they seemed to be followed by a sigh like the action of late April to early May. Will the conditions of the economy keep the index rising this time? The S-fund outperformed the TSP funds with a 4.06% gain this week.
EFA (EAFE Index / I-fund) recovered ground with the U.S. indices this week but at a lesser magnitude. The open gap from last week was closed and the index ended the week back above its 20-day EMA. Currently the index is in a bear flag that tend to break down. The I-fund gained 1.50% for the week.
BND (Bonds / F-fund) fell Monday as stocks soared and chopped around in a tight range for the remainder of the week. On Friday the index bounced off the 200-day EMA and eventually closed just above the 20-day EMA. Not a great performance in the bond market but slow grind recovery in bonds was not compromised. The F-fund lagged the TSP funds this week with a 0.41% loss, the only loss in the TSP funds.
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
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