Daily Market Commentary

Stocks continued the April pullback yesterday as stocks gapped lower and while they fought back to close off the lows, the indices did post solid losses on the day. Higher yields hit the small caps particularly hard as the S-fund lost 1.5% on the day. The C and I-funds gave up about half of that, and bonds were down for a second day, although like stocks, they closed near the highs of the day.

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Last week the stock market pulled back early in the week but moved higher heading into the holiday weekend. Now we started a new week, a new month, and a new quarter on April 1st and, as the market loves to do, it took my repeated reminders that early April tends to be strong, and threw that on its head. It wasn't a terrible day with the Nasdaq closing positive and the S&P down just modestly, but the small caps, which had been leading recently, got slapped down on a day that seasonality followers ...

Stocks ended a choppy week of trading with some flat to mixed results on Thursday. We saw small gains in the Dow and S&P 500 (C-fund) while small caps led and the I-fund was down on another rally in the dollar. The F-fund was down as yields moved higher. We saw some good returns in the stock market in March making it 5-straight months with a gain for the S&P 500. That's actually a good sign.

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The stock market loves to fool investors (or market timers) as much as possible, so just as we all got used to strong openings followed by late sell offs, the market threw us a curve on Wednesday and gave us a strong open and a stronger close. The Dow gained an impressive 478-points, and while it was a fairly broad rally, it took that late push higher to move the Nasdaq into positive territory. Small caps led and all three TSP stock funds closed at a new high for the year. Bonds rallied as yields ...

Stocks were down yesterday making it three days in a row of losses, and four days in a row where the indices closed near the lows of the day after late sell offs. Trading volume isn't very high so it may not be institutional selling, but clearly the sellers have been dominating the final hour of trading this week. Both yields and the dollar reversed their earlier moves adding to days flip flopping action.

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