The TSP funds gave back the previous week's gains this week. The first full week of December did not carry the holiday spirit. Most of the losses were accumulated in the first two days of the week with back to back sell-offs putting the C and S-fund down more than 3% and 4% respectively. Trading in the remaining three days was tight in comparison but a late sell-off on Friday did extend the weekly losses a bit deeper.
The I-fund was down but not at the same magnitude. The I-fund kept its losses below 2% in the first through Tuesday and ended the week with a loss of 1.25%. This was the sixth straight week the I-fund has outperformed the C and S-funds.
The F-fund was down for the week despite a 0.88% gain on Wednesday alone that had it up 0.44% for the first three days. It was the last two that eventually dropped the F-fund price enough to end its week with a 0.45% loss.
Projections of a recession sometime in 2023 are building up in the headlines. That adds to the weight of high inflation and the celebration that it may have peaked was short-lived. The next question is how long will it stick around and what effect will that have on an economy that may also be contracting.
Investors will have a lot more to think about in the coming week. The November Consumer Price Index will be released Tuesday just in time for the FOMC meeting starting that day and ending the next. After reacting to the CPI, investors will get to hear from Fed Chairman Jerome Powell whose words just last week sparked a rally by nearly confirming a 0.5% rate hike in this coming meeting. Will he be able to satisfy investors need for dovish comments again? Who knows, it is not always his specialty.
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Here are the weekly, monthly, and annual TSP fund returns for the week ending December 2:
SPY (C-fund) was quick to retreat to its 200-day EMA on Monday. This was a chance for the longer-term moving average to act as support. That support didn't last past Monday's lows. The ETF slipped below the 200-day EMA Tuesday in another sell-off and traded in a relatively tight range between the 200-day EMA and the 50-day EMA for the rest of the week. A trend line (dotted line below) from the climb up since October was also broken. This could be the beginning of the C-fund's technical break down. The bulls only real solace right now is hopes for a Santa Claus rally in the second half of the month starting with accommodative language from the FOMC this coming Wednesday. The C-fund los 3.35% this week.
The Dow Completion Index (S-fund) slipped below its 20 and 50-day EMAs. The index established lows early in the week and also traded in a tight range for the rest of the week. An open gap from November was partially filled and the index closed within it on Friday. The S-fund lagged the TSP funds with a loss of 4.82%.
The ETF EFA (I-fund) pulled back with U.S. stocks but to a lessor degree. The price fell back below the peak of August intra-week but the I-fund was up yesterday while the C and S-funds were down putting the price back above the August high. The I-fund was down 1.25% for the week, producing a better return than the C and S-fund for the sixth straight week.
EFA's next feat will be reaching the highs established at the beginning of June. That would be more than another 3% from the current price.
BND (F-fund/Bonds) had a mixed week. After starting off with early losses, the ETF gapped up Wednesday putting the F-fund in positive territory for the week. But the index came back to fill that gap Friday dropping the F-fund price by 0.45% for the week.
Thomas A Crowley
wwww.tsptalk.com
LLast Look Report
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