TommyIV's TSP Talk Blog

Large cap stocks reached new record highs twice this week thanks to good earnings reports and an uplifting GDP report. Not all earnings this week have been on the winning side but bigger players like Amazon and Facebook stole the show with their outperforming reports. The bar has been set lower than usual for earnings this season but leading companies so far have given investors less reasons to sell.

Stocks surged to new highs Friday following the release of the latest GDP report. The report fed the bulls exactly what they wanted; a strong growth rate in the first quarter without a jump in inflation. The economy is growing but not too fast to provoke the Federal Reserve to increase borrowing interest rates. The steady growth and inflation rates is fueling the surge in stocks this year and so an off set in either could arguably be the kicker for the bulls' run.

Economic numbers are in the bulls favor, trade talks seem to be moving towards a deal, and earnings season has kicked off strong. The new highs in large caps also provides confidence in investors who worried whether the indices could storm moving past the highs before last years crumble in the market.

Bonds were also up for the week (F-fund up 0.38%) which could be the fact that the GDP numbers weren't too strong to suggest the fears of a future recession are gone. Rather we are at a sweet spot in the economy that justifies buying stocks and bonds.

Despite being left out of the spotlight with large caps reaching new highs, the S-fund led the TSP funds for the week with 1.55% gain. The laggard for the week was the I-fund which took a modest loss of 0.13% for the week; the only TSP fund in negative territory.




Here are the weekly, monthly, and annual TSP fund returns for the week ending April 26th:




The SPY (S&P 500 / C-fund) reached new highs early this week and then used the old highs as intraday lows. An open gap still lingers below for the index but support markers will make closing that gap a task. Earnings will continue to come in and be the driver for the the bullish sentiment. The C-fund rose 1.21% for the week.




The Dow Completion Index (S-fund) outperformed the TSP funds this week. It did so without breaking above any major trend lines such as in the S&P 500. This index still has a ways before it too can produce new highs but that could be an attractive attribute for investors looking for growth. The S-fund was up 1.55% for the week.




EFA (EAFE Index /I-fund) fell this week after hitting rising resistance the previous week. The decline was nothing major. An open gap was filled and the lows were on par with rising support setting up another possible test of the rising support if all goes well. The I-fund fell 0.13% for the week.




AGG (Bonds / F-fund) gapped up twice this week and closed just off its highs for the week. There are now three open gaps for this index to fell below, one of which sits below the 20-day EMA that has been under bond prices for most of the year.

Bond investors also liked the GDP numbers released Friday. The numbers did not suggest a perfectly healthy economy but one that is doing...okay. Typically investors move to bonds to protect themselves from a problematic economy. So despite the growth, investors are still not confident that the problems that drove stocks down last year are out of the way. 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
Facebook | Twitter

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.