We just can't seem to escape European headline risk. Between Greece's unexpected referendum on its bailout plan and Italy's financial downward spiral, risk has returned almost as fast as it seemingly disappeared. Not that it every really left, truth be told. But the market would have us believe it did.
The Volatility Index shot up 20% today, which was in addition to the 10% surge yesterday, so fear is rising.
Stocks pulled back sharply yesterday on some negative news out of Greece, the news of a major hedge fund filing for bankruptcy, and some old fashioned profit taking on the last day of a huge month for stocks. The Dow lost 276-points.
For the TSP, the C-fund lost 2.47% yesterday, the S-fund fell 2.42%, the I-fund plummeted 4.92%, and the F-fund (bonds)
The market gave up some of its impressive gains today, but October was still a huge month for the bulls, with the S&P 500 finishing the month with a gain of almost 11%.
The sell-off began overseas as the elation over the agreements reached last week at the EU Summit wore off. Some of the bourses saw losses of more than 3% on the day.
And the dollar soared in response as the I fund realized a loss of 5.19% by the close.
Stocks were mixed on Friday after the 500-point rally on Wednesday and Thursday. The Dow gained 23-points and the S&P was up fractionally, but the Nasdaq, Transportation Index, and small caps all closed lower. For the TSP, the C-fund was up 0.04% on Friday, the S-fund lost 0.22%, the I-fund fell 0.68%, and the F-fund (bonds) gained 0.44%.
It's been several weeks since the Top 50 had a shift in stock allocation exceeding 10%, but this week there's movement at the top. Here's the charts:
The Top 50 increased their collective stock exposure by a healthy 17.82% going into the new trading week. Total stock allocation now sits at 34.06%. That's still not exactly bullish, but not nearly as bearish as it was last week. What I find interesting