Index performances were mixed in the shortened week that followed the previous week's steep rally. While the S&P 500 price oscillated through the four day week, the C-fund eventually ended up just 0.06% down from where it started. Action for small caps was not as favorable. The S-fund dropped 2.79% in the four days but that was only giving up little more than half of the gains acquired the previous week.
The I-fund stood alone with gains for the week among the TSP stock funds. Although below its weekly highs, the I-fund ended the week up 0.43% to pad the recent stretch of gains and further solidifying its hold as the top TSP performer so far in 2023.
But it was bonds that led the TSP funds for the week. The F-fund added 1.12% this week to now outperform the S-fund for the year.
After leading the TSP funds in 2023 performance for more than 2 months, the S-fund is now lagging all the funds outside of the G-fund after the fist week of the fourth month. How the tables have turned. So far this year, it has been those willing to jump between funds that are outperforming. It has not a been a buy and holder's market.
The market narrative this week was focused on the jobs market. The latest data paints a slowing jobs market. Stock markets and the TSP were closed on Friday but investors still get the long weekend to soak in the March Jobs Report. The report was mostly on target with expectations but it was the lowest amount of jobs added in more than two year, yet still considered historically high. Nobody was caught off guard from the report but with consideration of other jobs data earlier in the week, investors are starting to sense a real slow down in the labor market.
This is looked at a couple different angles. It is good for those focused on inflation and the Fed. The Fed has been focused on labor markets because they see wage growth and more jobs as a leading cause to higher inflation. So investors can rejoice that the latest deceleration of the labor market as a stop sign for rate hikes by the Fed.
Others see the calming labor market as the beginning of a larger economic slowdown that the market has not priced in yet. The consumer is the backbone of the largest economy in the world and if their income takes a significant hit due to the Fed's efforts, then that could eventually roll the the wheel of the economic growth in the other direction.
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Here are the weekly, monthly, and annual TSP fund returns for the week ending April 6:
SPY (C-fund) was up to start the week but Turnaround-Tuesday dropped the C-fund price into negative territory for the week. It was a rally on Thursday that reduced the weekly losses to just 0.06% for the C-fund. The ETF remains in the middle of a trading channel but does have an open gap it could fill below the support line.
The Dow Completion Index (S-fund) tests its 50-day EMA this week and I'd say we can call it a failed attempt. Although the index closed above it Monday afternoon, the index quickly pulled back Tuesday and there was a more broad rotation out of small cap stocks the rest of the week. The S-fund lagged the TSP funds with a loss of 2.79%
EFA (I-fund) traded in similar fashion as the U.S. stock indices, but the downside was never enough to erase the early gains produced at the beginning of the week. The I-fund lost 0.64% on Wednesday, yet remained up 0.19% for the week. Gains on Thursday did not put the I-fund back at its highs for the week but stood to be a decent 0.43% weekly gain while the other stock funds ended the same period in negative territory.
BND (F-fund) outperformed stocks this week three consecutive days of gains to start the week with a slight pull back on Thursday. The F-fund rose 1.12% in that time. But while stock markets and the TSP were closed on Friday, 10-year Treasury bonds prices fell some after the March Jobs report was published. The F-fund reached a new high for 2023 on Wednesday before pulling back slightly Thursday. The F-fund is now up 4.29% for the year which outperforms the S-fund.
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
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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.
