TSP Talk Blog

Whether it was a culmination of less favorable inflationary data, earnings and nervous guidance from JPMorgan Chase's Jamie Dimon, or just the dip buyers giving up for a day and allowing a pullback to ensue, stocks relented to the bears on Friday and we had the worse day for the S&P 500 since January. The losses were broad and sharp despite some relief in the bond yields.

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1The bull market is not going away easily, if at all, but the economic data and the Fed are continuously bombarding investors with new information that is whipsawing the indices. Most of the big losses from the reaction to Wednesday's hot CPI report, were erased after the dip buyers bought the cooler PPI data. The Dow was flat but the broader indices did quite well. Yields and the dollar were up again, but the dip buyers ignored it on Thursday.

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The stock and bond markets didn't get through the CPI unscathed, but it could have been worse as we did see the indices close off their lows. The charts are showing some cracks with those losses so this morning's PPI becomes that much more important. Perhaps it will reverse the decline but the hot CPI does poses a problem for the market. The big three indices lost near 1% on the day and small caps, which are more interest rate sensitive, took a near 2% haircut. Bonds fell sharply as yields moved ...

The bulls are not giving up easily as the bears showed their teeth for most of the day yesterday, but the bulls battled back and took the S&P 500 and Nasdaq back into positive territory by the close. The Dow came back from a 200+ point loss to close nearly positive, but it was negative and that's now 6 down days in the last 7. Bonds moved up on a dip in yields as another Fed member gave some comments, this time more dovish.

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Stocks opened higher on Monday but it was a very choppy and flat day for the big three indices yesterday, but small caps bucked that trend and rallied nicely, despite another push higher in yields. The action wasn't great for the large caps as dip buyer were met with profit takers and perhaps people like me who saw Thursday's action as a possible warning sign. Bonds were down again on the higher yields, and the I-fund was up on a weaker dollar.

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