The focus this week was centered around technology company earnings. The indices were dragged around following the reaction of earnings from tech giants such as Meta (Facebook), Apple, Netflix, and Amazon. The last two days were manipulated by the buying triggered by Meta's earnings and new members bringing the S&P 500 (C-fund) back to positive territory for the second time this week. That was followed by Amazon's worst quarterly loss in seven years reported after the bell Thursday. This sparked a deep sell-off Friday that erased the little gains for the week the S&P 500 had produced through Thursday and dragged the index down 3.64% on the day. Both the C and S-fund were down more than 3% for the week with the S-fund lagging. The I-fund fell 2.44%.
Friday's action showcased how sensitive market participants can be and how volatility continues to plague TSP investors with just two to three opportunities a month to navigate the swings. High inflation and rising interest rates bring a connotation of a potential recession. To add to that, the first quarter GDP came out Friday and shrank for the first time since the spring of 2020 when the pandemic took off. So of course, we see why traders navigate the market with their fingers hovering over the sell button. But hidden under the negativity there is strength giving the bulls credence. Consumer spending, the backbone of the United States economy, rose 2.7% in the first quarter remaining strong even as prices rise.
Consumer demand along with the continued struggled to keep up on supply are feeding the acceleration in inflation. The Federal Reserve can't increase supply, but what they can do is slow down demand by rising borrowing cost making debt more expensive for consumers. How this will affect the U.S. economy down the road is something even the Federal Reserve themselves can't accurately predict, but they know persistent high inflation must be avoided. This coming week they will raise interest rates for the second time in a row and they have made clear that a 0.5% increase is on the table, something they haven't done in more than 20 years. Whatever they decide this week will very likely spark more volatility.
April was a hard month for anyone outside the G-fund. We hope everyone stays smart and unprovoked by emotion in May. Volatility is expected to remain high for at least the first half of May with the FOMC meeting and more earnings reports. Set aside what happened to your portfolio in April and look forward to what you want going forward.
Bonds were flat for the week after rising in the first half and giving back those gains in the second half of the week.
Looking for an edge on your TSP return? Get the Last Look Report for as low as $4.19 / month. The report is a daily email on the TSP AutoTracker moves, news, forum threads, and more before the IFT deadline. The service is aimed to help you make your own IFT decisions by giving you relative information 30 min prior to the deadline including where the members of TSP Talk are moving their money.
Here are the weekly, monthly, and annual TSP fund returns for the week ending April 29:
SPY (S&P 500 / C-fund) started the week with gains on Monday but the back and forth between the bulls and the bears was on from there. The end result was a sell-off Friday that brought the ETF down 3.62% for the day. That after reaching positive territory Thursday, that left the C-fund with a 3.26% loss for the week. The selling was sparked by a disappointing earrings report by tech giant Amazon.
SPY (C-fund) closed at a price it hadn't closed at since June of 2021. Essentially erasing nearly a year of gains.
The Dow Completion Index (S-fund) also made a lower low for the year following Friday's broad sell-off. The index still has some declining support going into next week. The broad sell-off was felt more for the week in the S-fund where it lagged the TSP funds falling 3.67% for the week and is now down more than 10% for 2022.
EFA (EAFE Index / I-fund) was down with U.S. stock funds but did not produce new lows and kept its losses below 3%. The lows of the year are not too far off though. The ETF spent most of April below its 20-day EMA which fell to its low for the year. The I-fund was down 2.44% for the week.
BND (Bonds / F-fund) gapped up to start the week and was approaching its 20-day EMA, but began to give back the early gains starting Wednesday. By the end of the week the F-fund ended with a mere 0.01% loss for the week. A relatively good week for a fund that has continued to struggle.
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
wwww.tsptalk.com
Last Look Report
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.
Friday's action showcased how sensitive market participants can be and how volatility continues to plague TSP investors with just two to three opportunities a month to navigate the swings. High inflation and rising interest rates bring a connotation of a potential recession. To add to that, the first quarter GDP came out Friday and shrank for the first time since the spring of 2020 when the pandemic took off. So of course, we see why traders navigate the market with their fingers hovering over the sell button. But hidden under the negativity there is strength giving the bulls credence. Consumer spending, the backbone of the United States economy, rose 2.7% in the first quarter remaining strong even as prices rise.
Consumer demand along with the continued struggled to keep up on supply are feeding the acceleration in inflation. The Federal Reserve can't increase supply, but what they can do is slow down demand by rising borrowing cost making debt more expensive for consumers. How this will affect the U.S. economy down the road is something even the Federal Reserve themselves can't accurately predict, but they know persistent high inflation must be avoided. This coming week they will raise interest rates for the second time in a row and they have made clear that a 0.5% increase is on the table, something they haven't done in more than 20 years. Whatever they decide this week will very likely spark more volatility.
April was a hard month for anyone outside the G-fund. We hope everyone stays smart and unprovoked by emotion in May. Volatility is expected to remain high for at least the first half of May with the FOMC meeting and more earnings reports. Set aside what happened to your portfolio in April and look forward to what you want going forward.
Bonds were flat for the week after rising in the first half and giving back those gains in the second half of the week.
Looking for an edge on your TSP return? Get the Last Look Report for as low as $4.19 / month. The report is a daily email on the TSP AutoTracker moves, news, forum threads, and more before the IFT deadline. The service is aimed to help you make your own IFT decisions by giving you relative information 30 min prior to the deadline including where the members of TSP Talk are moving their money.
Here are the weekly, monthly, and annual TSP fund returns for the week ending April 29:
SPY (S&P 500 / C-fund) started the week with gains on Monday but the back and forth between the bulls and the bears was on from there. The end result was a sell-off Friday that brought the ETF down 3.62% for the day. That after reaching positive territory Thursday, that left the C-fund with a 3.26% loss for the week. The selling was sparked by a disappointing earrings report by tech giant Amazon.
SPY (C-fund) closed at a price it hadn't closed at since June of 2021. Essentially erasing nearly a year of gains.
The Dow Completion Index (S-fund) also made a lower low for the year following Friday's broad sell-off. The index still has some declining support going into next week. The broad sell-off was felt more for the week in the S-fund where it lagged the TSP funds falling 3.67% for the week and is now down more than 10% for 2022.
EFA (EAFE Index / I-fund) was down with U.S. stock funds but did not produce new lows and kept its losses below 3%. The lows of the year are not too far off though. The ETF spent most of April below its 20-day EMA which fell to its low for the year. The I-fund was down 2.44% for the week.
BND (Bonds / F-fund) gapped up to start the week and was approaching its 20-day EMA, but began to give back the early gains starting Wednesday. By the end of the week the F-fund ended with a mere 0.01% loss for the week. A relatively good week for a fund that has continued to struggle.
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
wwww.tsptalk.com
Last Look Report
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.
