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TSP Talk Weekly Wrap Up

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Stocks turned around dramatically to start June following the sharp losses of May. Tariffs and poor economic data plagued stocks last month; the Federal Reserve quickly made stocks an attractive buy again after hinting at the possibility of lowering interest rates. The Fed has been on the sidelines for some time keeping interest rates steady. Now that they are back in the headlines stocks are back to rallying to bad news. That is exactly what happened Friday when a poor jobs report was celebrated by stock investors who invite the dovish action of Federal Reserve.

In the first week of June all three of the stock TSP funds reclaimed more than half of the losses of the whole month of May. Is that how the action in June will continue? Probably not. The tariff issue with Mexico could be resolved soon to add to another reason to buy but conditions can quickly, if they haven't already, change from being over sold to over bought. Volatility will continue as markets try to find their footing again.

The C-fund outperformed the first week of June with nearly 4.5% in gains after losing more than 6% in May. The F-fund also added to its gains this week because bad economic data such as this week's jobs report turn logical traders to the safety of bonds. Stock buyers are betting on a bad economy to provoke the Fed to artificially accommodate the stock market.




Here are the weekly, monthly, and annual TSP fund returns for the week ending June 7th:




The SPY (S&P 500 / C-fund) broke through it falling trading channel and its 20 and 50-day EMA this week. In the process filled an open gap from the middle of May. The next price obstacle for this chart if it trades higher will be the high late May. If the index happen to rally above that price early it may become reliable support. The C-fund outperformed the TSP fund this week with a gain of 4.46%.




The Dow Completion Index (S-fund) bounced back last week but could not pass its 50-day EMA on Friday. The index is back above its 200-day EMA it fell below last month and filled an open gap from May as well. The S-fund rose 3.8% this week.




EFA (EAFE Index /I-fund) was up this week with a couple of gap ups to move back above its 50 and 200-day EMA. The process did leave a couple of open gaps below but momentum could push the index into the gap above from early May. The I-fund rose 3.23% this week.




AGG (Bonds / F-fund) was up early for the week but moved mostly sideways for the week. The poor jobs report Friday gave the index its gains for the week but was off of its highs early in the trading day. Rising support held but the index is about to be wedged between support and resistance next week. The bonds index has been successful lately of breaking through overhead resistance. The F-fund was up 0.38% 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
www.tsptalk.com
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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SPY (C Fund) (delayed)

(Stockcharts.com Real-time)
DWCPF (S Fund) (delayed)

(Stockcharts.com Real-time)
EFA (I Fund) (delayed)

(Stockcharts.com Real-time)
AGG (F Fund) (delayed)

(Stockcharts.com Real-time)