Coming off an already impressive start to November, the TSP stock funds continued that success with a jump higher on Tuesday in response to the latest Consumer Price Index (CPI). Consumer prices rose 3.2% from the previous year according to the Tuesday report. This was less than expected and down 0.5% from the previous month's year-over-year increase.
Although this is still higher than the Federal Reserve's 2% target, it sent the message to investors that inflation is cooling sufficiently, and the Federal Reserve can end its rate hike campaign and even look on to cutting rates next year. The weight of higher inflation seems to be coming under control without a recession.
The S-fund was the greatest benefactor from the Tuesday rally. The fund added 4.4% for the day while the C-fund rose around 2%.
What was just as impressive following the Tuesday's gap up rally was that prices stay elevated through the week and the TSP funds padded the fresh gains through Friday.
Next week is the Thanksgiving holiday so markets will be closed on Thursday and the Friday will be a half day of trading. Thanksgiving holds a positive holiday bias in the past so investors may not be looking to sell so fast. The latest rally in November seems overextended but there are still plenty of investors who missed out willing to buy in and keep prices buoyant.
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Here are the weekly, monthly, and annual TSP fund returns for the week ending November 17:
The SPY (C-fund) made an unexpected technical leap forward on Tuesday. The ETF gapped up after reaching a four month long falling resistance trendline. That open gap was the third opened so far in November and the ETF has not yet felt the gravity of those price gaps yet. The C-fund climbed 2.31% this week which added to an already impressive return for November that is now 7.77%.
The small cap index DWCPF (S-fund) outperformed the other TSP funds for the week. Like the other charts, DWCPF gapped up on Tuesday. But unlike the other charts, DWCPF moved right through its 200-day intraday with no problem. The 200-day EMA had been a significant trend line in the previous months acting as both support and, more recently, resistance. The index had been trading below the 200-day EMA since the middle of September. Will it now use it as a foundation for higher prices? Or has it lost its significance as a support line to traders?
The S-fund gained 4.64% for the week. The S-fund also leads the TSP funds for the month with an 8.74% gain.
The ETF EFA (I-fund) went on to close a gap from September after opening the market wide gap on Tuesday. The ETF's next challenge moving higher would be the peak prices of late August. The I-fund added 3.95% for the week.
Bonds were up with stocks this week and the BND ETF also gapped up on Tuesday. The highs of the week fell on the chart's 200-day EMA. The ETF has traded below its 200-day EMA since July. The F-fund added 1.36% for the week.
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 TSP Talk - Market Commentary. If you need some help deciding what to do with your account, perhaps one of our premium services can help.
Thomas Crowley
(TommyIV)
www.tsptalk.com
Weekly Wrap-Ups Archive
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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.
