Stocks started the week off with a sell-off but rebounded and soared higher the rest of the week. All the TSP stock funds were down more than 1% after Monday's action. The C-fund followed up with four straight days of gains and even closed Friday with a new all time high. The new highs and streak of gains were impressive for the C-fund but it was the S-fund that outperformed for the week even with a second day of losses Thursday. Small caps got their boost for the week Tuesday after adding 2.74% for the day.
Data suggesting a slow down in the economic recovery and the threat of more economic shutdowns around the world due to the new Delta Covid Variant had stressed the markets over the weekend. There are still many issues lingering and bringing uncertainty along such as inflations, the labor market, supply chains, and of course the threat of another pandemic wave. Yet dip buyers are still very active and may be artificially keeping indices afloat while the underlying market and individual stocks struggle. Earnings season really got going this week and that added enough positive sentiment to kick start buying again. Earnings continue next week with some large names scheduled to report. Swings have been prevalent the last few weeks and stocks are coming off an upswing; can earnings sustain the momentum?
The S-fund outperformed this week by adding 3.38% for the week but the fund did decrease 0.89% over the last two weeks. Bonds were up again this week but peaked Monday and spent the rest of the week giving back most of the early gains.
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Here are the weekly, monthly, and annual TSP fund returns for the week ending July 23:
The SPY (S&P 500 / C-fund) sold off Monday and fell below its 20-day on the day and momentarily traded below its 50-day EMA. The follow up was four straight day of gains pushing the index to new all time highs by the end of Friday. Rising overhead resistance kept the index from rising higher. We will see if that will hold next week if earnings perform well. A gap opened up Friday morning and will likely be an easy target if we start to see some profit taking. The C-fund was up 1.97% for the week.
The Dow Completion Index (S-fund) looked in trouble Monday after steep declines the previous week continuing. However an impressive rebound Tuesday pushed the index back just below its 50-day EMA. The index lost its popularity late in the week but did add some more gains and was able to close Friday with above its 20-day EMA and with a gain of 3.38% for the week to outperform the TSP funds. The S-fund has seen big moves over the last two weeks but has come out with a 0.89% loss in that span.
EFA (EAFE Index / I-fund) gapped down and opened below support to start the week. But the index rebounded with U.S. stocks and ended the week back above its 20 and 50-day EMAs. There was an open gap left behind but if the swings in the market prevail then it won't be open long. The I-fund added 0.74% for the week.
BND (Bonds / F-fund) started Monday with a 0.75% gain. The index opened higher Tuesday but began to drift down the rest of the week. The gap produced from Monday's gap up was closed by Wednesday and another produced Wednesday was closed Thursday. The F-fund gave back most of its early gains as money moved into soaring stocks. The F-fund ended the week with a gain of 0.21%.
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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