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TSP Talk Weekly Wrap Up

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Stocks peaked on Tuesday morning this past week, then sold-off for three days to push all the TSP stock funds down 1% to near 3%. Investors starting selling during the new Fed Chairmen Jerome Powell's testimony to congress Tuesday due to his positive outlook on economic growth and his not so dovish comments on the potential of as many as four interest rate hikes by the Fed this year. It is not the Fed's job to keep the stock market up but Mr. Powell did make comments about previous Fed moves that he said the market responded well to; meaning they are keeping an eye on stocks.

Mr. Powell spoke again on Thursday and again stocks sold-off to his remarks but he was just the opening act as President Trump took center stage to announce his plan to add tariffs to steel and aluminum imports but did not provide much details. This added more uncertainty to an already nervous market and stocks sold-off further. Stocks opened lower on Friday but took back those early losses throughout the day as traders digested the tariff news to realize they really didn't know much about the impact on the economy the tariff would really have.

President Trump promised concrete policies about the tariff this coming week so such details will give investors and analyst more to room to debate over its potential impact on the consumer as well as the global economy.

The G-fund led the funds this week with just the F-fund also in positive territory but even closer to an even return for the week. The TSP stock funds were all down more than 1% with the I-fund lagging as it dropped 2.85% on the week.

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

Here are the monthly TSP returns for the month of February:

February was the most volatile months we've seen in years and signals a new character in markets as we move forward this year. If this increase in volatility continues, it will be psychologically harder for long-term investors to just buy and hold than when we had tight one direction movement.

The SPY (S&P 500 / C-fund) was thought to be on course to test the January highs going into the week but that idea was quickly put aside as stocks sold-off this week and now there are thoughts of a test of the February lows first. It seems we may headed towards the apex of the trend lines and there may not be a test of the highs or lows for a few months. Right now the index sits about in the middle from the recent highs and lows. The C-fund was down 1.98% for the week.

The Wilshire 4500 Completion Index (S-fund) broke out to the upside of what looked to be a bull flag Monday but the index sold-off with the large caps the rest of the week as a multitude of pressure was put on stocks. The S-fund outperformed the C-fund as small caps will be less affected by the tariffs put on by the Trump administration. The index made its way to just under its 50-day EMA by the close Friday. The S-fund was down 1.05% for the week.

$IEE (EAFE Index / I-fund) sold-off throughout the week with U.S. indices but did not have a relief day as we saw in the C and S-fund indices on Friday. Rather, the index opened lower and got the index closer to another test of its 200-day EMA. The I-fund was down 2.85% for the week.

AGG (Bonds / F-fund) traded near flat for the week. Mr. Powell's comments on inflation pressure dropped the investors projections of the spending power of bond yields so bonds did sell-off. We are seeing some more life in AGG than what we saw throughout February and it did entered back within a trading channel that was established before selling accelerated in the index. The 20-day EMA provided resistance marking the highs of the week which is just one of many trend lines the index must make it through to turn around. Earlier this week I posted a blog on some more long-term outlooks of bonds and so far the long-term support I mentioned has held but the short-term outlook of the index is not attractive. The F-fund was up just 0.02% 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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SPY (C Fund) (delayed)

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DWCPF (S Fund) (delayed)

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EFA (I Fund) (delayed)

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AGG (F Fund) (delayed)

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