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TommyIV's TSP Talk Blog

TSP Talk Weekly Wrap Up

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The Fed remained accommodative to the market this week but the dovish Fed along with poor manufacturing data made the signs of global growth slowdown all too real. On Wednesday the Fed suggested they are unlikely to raise interest rates this year. Investors followed with a failed rally Wednesday that was revived Thursday establishing new 2019 highs for the S&P 500. The weekly gains were quickly given back and then some on Friday after manufacturing reports held more signs of an economic slowdown in both Europe and the U.S.

The poor manufacturing reports led investors to buy long-term bonds with growing doubt of long-term growth in the economy. This sent long-term yields below short-term yields which many argue is a sign of an upcoming recession; the last time this happened for U.S. bonds was in 2007. In turn, stocks sold-off early Friday and closed at their lows for the week for a loss.

Worries about the health of the world economy is not new. The concerns are real but investors' attention spans are short. Market players are split on how seriously the reaction this week will affect the market action to come. The bulls have had the momentum all year but their reign came off an aggressive three month bear take over. So things can turn around quickly when everything is lined up right.

The F-fund outperformed this week with a gain of 0.87%. That is the F-funds greatest jump in value for a week that I can recall in the last four years of writing this blog (I may be wrong). All the TSP stock funds were down for the week with the S-fund lagging with a loss of 2.23% for the week.

Here are the weekly, monthly, and annual TSP fund returns for the week ending March 22nd:

The SPY (S&P 500 / C-fund) fell sharply to end the week after reaching new highs for the year Thursday. The low of the week was at an intersection of a number of support lines including the index's 20-day EMA. Technically this index is set up for a bounce off the current price but with the doom and gloom surrounding the economic growth it wouldn't be surprising to see the support fail especially if investors are given more reason to doubt the economy. The C-fund fell 0.74% for the week after being up most of the week coming into Friday.

The Dow Completion Index (S-fund) fell on Friday too but did not have the early gains like large caps to swallow the losses for the week. The index fell below its 20-day EMA and even closed in the small price range between its 50 and 200-day EMA. Two possible lines of support were broken for the week which could be some foreshadowing for how large cap indices could perform sitting on support now. The S-fund lagged the TSP funds with a loss of 2.23% for the week.

EFA (EAFE Index /I-fund) fell Friday open a new gap in the process of closing an old one. The lows of the week were at the rising support line of the December and March lows. Below low that is the 200-day EMA. There still sits an open gap from February but the index must move below its 50 and 200-day EMA to fill it. The I-fund fell 0.98% for the coming off the manufacturing reports that came out in Europe on Friday that showed a slowdown in production.

AGG (Bonds / F-fund) broke through a rising resistance line that has been steady all year. This happened Wednesday after the Fed remained Dovish but the bonds rose higher after data suggesting economic slowdown sent investors to the safety of long-term bonds. This produced an open gap between Thursdays highs and Friday's lows. The F-fund outperformed the TSP funds with a gain of 0.87% 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)

( Real-time)
DWCPF (S Fund) (delayed)

( Real-time)
EFA (I Fund) (delayed)

( Real-time)
AGG (F Fund) (delayed)

( Real-time)