The market had a lot to process this week and investors' feelings changed day to day to give us a week of inconsistency. Monday's open was the first chance investors got to react to the March Jobs report that came out when the market was closed the previous Friday. Stock indices opened down to start the week but that opening price would be the low for the week. Prices climbed back through intraday action Monday.
The steady climb higher was disrupted by the Consumer Price Index that came out Wednesday. The CPI is a big report card on inflation for investors. The CPI was up 5% from the previous year which was the lowest level in nearly two years. Inflation is falling towards the Fed's 2% target but still has to be cut by more than half. The report induced choppy action Wednesday with concerns of underlying price pressures still present.
The following day the Producer Price Index gave another sign of ease in the inflation battle. The PPI had its largest monthly decrease since March of 2020. Market participants once again had a change in heart and stock rallied through the day reaching new highs for the week (and new highs for the year for the I-fund).
Finally the week ended with stocks pulling back Friday off the highs. Some bank earnings came in with better than expected results but it was not enough to keep buyers excited. Investors also faced another economic report of lower consumer spending, the backbone of the U.S. economy, and thus triggering some to fear an upcoming recession.
All put together, the inconsistent action left the TSP stock funds with gains for the week. The best performer among them was the I-fund with a 1.96% gain. The F-fund lagged with a loss of 1.09%.
Next week will pick back up with more bank earnings and some other large cap companies reporting earnings through the week. Earnings are a report on the recent past performance. Stock prices are a prediction for future performance. How have these larger companies done through an environment of high borrowing costs and high inflation? Investors will be deciphering the upcoming earrings deciding whether to stick with larger companies when recession has been a lingering word among analysts.
Looking for an edge on your TSP return? Get theLast Look Reportfor as low as $4.19 / month. The report is a daily email on theTSP Talk AutoTrackermoves, 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 14:
SPY (C-fund) had a choppy week but still managed to be held by rising support established by action in March. Support was not the only force at play, Fridays' high was established early in the day and matched the closing high of 2023 established at the beginning of February. That is a price would be buyers have to pay attention to.
The dotted lines (includes support discussed) gives us a representation of the trading channel and rate at which the ETF for the S&P 500 (C-fund) has been rising over the last month. It has been an impressive run, but as we head straight into the heart of earnings season and potentially another rate hike in the next FOMC meeting investors may second guess buying more large cap stocks. If momentum can establish a new 2023 high than we might again see another round of FOMO drive prices higher. The C-fund lagged the TSP stock funds this week with a gain of 0.81%.
The Dow Completion Index (S-fund) finished its week off the highs after pulling back Friday. The index is currently pinned risistance of a three month falling trend line and a more short-term rising support line from the last month of action. Both trend lines could be broken and the index could trade sideways with its 20-day and 50-day EMAs. The S-fund gained 1.44% for the week to outperform the C-fund.
EFA (I-fund) made a significant technical move above it previous February highs to establish new highs for 2023. The I-fund did not end at its weekly highs but remained above the February high through three days of trading. Is this a preview for what is next in the S&P 500 (C-fund)? There are a number of open gaps below but that is common with this ETF whose markets it follows trade at different times as the U.S. market the ETF is traded. The I-fund led the TSP funds for the week with a gain of 1.96%.
BND (F-fund) fell this week and ended Friday at its lows after better than expected bank earnings have settle fears that drove bond prices up in the last few weeks. BND gapped down to start the week, only partially filled that open gap, then gapped down once again to close the week. The ETF closed about even with its 20-day EMA. More bank earnings are on their way next week. We will see how they affect the bond market. The F-fund lagged the TSP funds with a loss of 1.09%.
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.
