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TommyIV's TSP Talk Blog

TSP Talk Weekly Wrap Up

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Stocks produced some rather significant losses this week compared to the status quo of endless gains. This was the first negative week for some major indices, such as the S&P 500, in 11 weeks. Why was this week different? Outspoken concerns of the recent acceleration in the increase in bond yields may have put some selling pressure on overbought stocks whose investors may be sensing some trouble and want to lock in some of the early gains of the fruitful new year. Also, the FOMC policy statement came out this week and though there was no rate hike this week it proposed a rate hike in March. Stocks spontaneously sold-off on the release of the policy statement but those initial losses were quickly bought back.

Stocks finished the week with a sharp sell-off Friday in reaction to the strong January jobs report that had a better than expected increase in jobs and wages. The sell-off reaction is another cue that investors are again concerned about the Fed raising interest rates too fast. With this attitude, good news for the economy becomes bad news for stocks. Anything that could persuade Fed members that it is a good time to safely increase interest rates is seen as a threat to the possibly fragile bull market.

The question now is whether this week was a healthy pull-back for stocks providing more buying opportunities or if this is the start to some more downside momentum. This is not easy for anyone to say because as Yogi Berra once said, "It's tough to make predictions, especially about the future."

Here are the weekly, monthly, and annual TSP fund returns for the week ending February 2nd:

Here are the monthly TSP fund returns for the month of January:

The stock TSP funds had a decent January with the C and I-fund both up 5% even with losses that last couple trading days of the month. The F-fund lagged with the only loss for the TSP funds for January.

The SPY (S&P 500 / C-fund) broke out of the tight rising trading channel of 2018 this week. After the release of the Jobs Report on Friday, the index fell below its 20-day EMA and closed just above a support trend line of the last couple months of 2017. The C-fund was down 3.82% for the week to lag the TSP funds.

The Wilshire 4500 Completion Index (S-fund) had similar results this week. An open gap was produced Tuesday that remains open. The index closed at par with its 50-day EMA. The S-fund was down 3.61% for the week.

$IEE (EAFE Index / I-fund) was down for the week and fell below its 20-day EMA Friday as it produced an open gap after opening down. There is another open gap below from the beginning of the year but the 50-day EMA has to be tested for support before closing the gap. The I-fund was down 2.74% for the week.

AGG (Bonds / F-fund) was down with bond yields reaching new highs. This pushed AGG down below some falling support. There was an open gap opened at Friday's open as bonds opened down. The F-fund was down 0.88% 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 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
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.

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S&P 500 (C Fund)
DWCPF (S Fund)
Dow Jones U.S. Completion Total Stock Market Index (^DWCPF)
EFA (I Fund)
iShares MSCI EAFE Index (EFA)
AGG (F Fund)
iShares Lehman Aggregate Bond (AGG)