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TSP Talk Weekly Wrap Up

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U.S. stocks were up again for the week thanks to a rally in front and following the monthly jobs report. The trading action early in the week was choppy and mostly in negative territory; investors were hesitant to buy more than the previous Friday's close yet positive earnings reports kept traders from selling too much.

The jump up in the price of Apple following the release of its earnings was the first big win for the bulls. More earnings reports, particularly from tech companies, attracted buyers late in the week to give the S&P 500 it fifth consecutive weekly gain. Stocks are on the more expensive side lately but good earnings have kept things that way. As earnings are winding down, where will traders look for a reason to buy?

Reassuring economic data from the jobs report this week also kept traders optimistic about the future of the economy. We are in a spot where things are looking good but everyone is questioning how long this will last and whether growth is too fast. This may be why there was a postive reaction after the figures were short of expectations on new jobs added and wage growth as it could be a positive for an economy that could be getting too hot to self sustain itself.

Bonds were down early but also found reason to rally following the jobs report as it suggested a slower increase in inflation which is good for bond holders.

The I-fund lagged the TSP funds with the only loss for the week down 1.44%. The fund fell late in the week following some strength in the dollar. The S-fund led the TSP funds with a gain of 0.92%




Here are the weekly, monthly, and annual TSP fund returns for the week ending August 3rd:




Here are the monthly TSP fund returns for July:



All the TSP funds had positive returns in July. The C-fund outperformed with a gain of 3.72% for July. The F-fund lagged with a slight gain of 0.04% which even fell short of the G-fund's 0.25% gain for the month.


The SPY (S&P 500 / C-fund) matched the highs of January right before the sell-off. That marked the highs for the week and the index retreated Friday to close an open gap from Tuesday. There is a number of support lines below the current price so it would be possible to see another test of the January highs next week depending on how the earnings reports turn out. The C-fund was up 0.61% for the week.




The Dow Completion Index (S-fund) had another chance to test its 50-day EMA after selling off the previous week. What we saw was similar to the same action in June. The index fell below and jumped around the trend line a day or two before rising back above with momentum. This will completely match the action we saw in June if the index continues to climb to test the highs its been unable to trade above since mid-June. How long will traders stick around small caps if the index fails to produce new highs. The S-fund was up 0.92% for the week.




EFA (EAFE Index / I-fund) quickly switched sentiment entering the new month as the index gapped down Thursday following a rally in the dollar. This pushed the index back below its 50-day EMA. The index did get support from its 200-day EMA which is a good sign technically. EFA produced an encouraging rising action in June. If investors believe the index could build on that momentum then this pull back would be a great buying opportunity. The I-fund fell 1.44% for the week to have the only loss in the TSP funds.




AGG (Bonds / F-fund) opened down below its 50-day EMA Wednesday before recovering most of the early loss and filling an open gap from June in the process. Bonds moved higher Friday following the jobs report which gave data showing wage growth is at a lower rate than analyst expected given the tax cuts. This leads to a slower rate of inflation which attracts investors to bonds which lose their purchasing power as inflation increases. The index was pushed back above it 200-day EMA and into positive territory for the week. The F-fund gained 0.15% 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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Updated 08-05-2018 at 02:18 AM by TommyIV

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TSP Talk Weekly Wrap Ups

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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)