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Stocks took a breather on Friday after a big 4-day rally to start the week. The Dow gained 114-points and it was one of the lone winners on the day, but 200 of those points were due to the rally in UNH, the heaviest weighted stock in the Dow, so without it, the Dow would have actually been down about 100-points which would have been more inline with the returns of the other major indices. Bonds were down sharply as yield moved higher, and the dollar was up ending a dramatic 7-day losing streak. ...

What Happened This Week?

It was a week to be in stocks, and possibly a week to get out of stocks. Inflation data excited investors this week and helped to raise all three TSP stock funds (C,S,I) to new 2023 highs on Thursday.

Something gave the S-fund a running start early in the week. The small-cap driven S-fund was up nearly 3% in the first two days of the week and before the Consumer Price Index was released. But it would not finish the week on top.
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The Producer Price Index (PPI) report came out on Thursday morning and confirmed the prior day's CPI report saying inflation is easing, and perhaps faster than analysts have suspected. The Dow gained 48-points which was well below the percentage gains of the S&P 500 and Nasdaq. Small caps also did well again as the rubber band continues to stretch. The dollar has been in free fall this month, so the I-fund is jumping.

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The CPI report on Wednesday showed more easing in prices and inflation and the stock market reacted as you might expect. The Dow gained 86-points, but because of some selling after the opening bell, that was 240-points off the morning highs. So the bulls were fully in charge in the morning after the emotional CPI report, but it was flat to down for the rest of the day as the indices get more and more stretched to the upside in the short-term. It wasn't a typical sell the news reaction because ...

Another rally for stocks as we head into today's key CPI Report. The Dow added another 300+ points and small caps have been moving up so rapidly that I feel like we're watching a rubber band getting stretched to the point of fraying. We can't deny that the action has been bullish, but the question is whether it can last or not. The technicals in the charts have been solidly positive but indicators and many fundamentals have some market participants and money managers remaining stubbornly bearish, ...