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TSP Talk Weekly Wrap Up

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More monetary stimulus along with the largest economic relief package in U.S. history aided more than 10% gains across stock indices. This was the first week where all the TSP stock funds were in positive territory since the first week of February. The week started by stocks falling producing a lower low for the recent stock free-fall. Quickly sentiment turned around Tuesday when the first signs of a economic relief package was being put together by lawmakers. Stock indices gapped up Tuesday and rallied higher for three days. Stocks pulled back the Friday but remained above the lows of Thursday.

Stocks performance now have the attention of the investors on the sidelines. But the question is whether this a typical dead cat bounce during a crash or if the economic stimulus is enough to keep the momentum. Economic experts see a recession of some magnitude as imminent and an eventual global effect from the economic stand still. But whether the market had already priced that in after falling more than 30% in a month is up for debate. There is no way of knowing as usual but the uncertainty of the virus outbreak makes it hard to expect a quick recovery. A pandemic fed market crash is new for markets so its hard to look at the past to find clues.

Although stocks had such an outperforming week, safe haven investments also had money thrown into them this week. Bonds (F-fund) were up 2.68% for the week and Gold had decent gains by mid-week. Investors obviously have doubt about the long-term effect of economic stimulus.

The S-fund outperformed the TSP funds this week with a gain of 13.5%.

Here are the weekly, monthly, and annual TSP fund returns for the week ending March 27th:

The SPY (S&P 500 / C-fund) produced lower lows to start the week but gapped up Tuesday and rallied until the 20-day EMA held as resistance at Thursday's highs. Friday's action traded between Thursday's high and low. It was a short-term win for the bulls that the lack of buyers Friday didn't send the index racing back to at least fill the new open gap. The C-fund was up 10.28% for the week yet remains down 21.01% for the year.

The Dow Completion Indices (S-fund) outperformed the TSP funds in gains but never reached its 20-day EMA like large caps. Above the 20-day EMA is an open gap from a couple weeks back. Could be incentive for investors to jump into the small caps. The S-fund was up 13.5% for the week but lags the TSP funds for the year with a 28.8% loss.

EFA (EAFE Index /I-fund) partially filled an open gap late in the week but was held up by the 20-day EMA that held as resistance. If not a test of the lows, filling the gap below would be a healthy move for the index for long-term recovery. The I-fund was up 12.09% for the week.

AGG (Bonds / F-fund) jumped back above its 200, 50, and 20-day EMAs. The index produced gains everyday this week which accumulated to a 2.68% weekly gain. Stock investors may have celebrated the stimulus package but it also attracted others to safety.

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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DWCPF (S Fund) (delayed)

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EFA (I Fund) (delayed)

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BND (F Fund) (delayed)

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