TommyIV's TSP Talk Blog

All green across the board for TSP funds this week. This was a well anticipated week with the last FOMC meeting of the year along with scheduled tariffs on China coming up with no deal locked in. The result was a dovish Fed and a buzzer beater conclusion to the phase one trade deal. The Fed kept rates steady and made no notions to return to raising rates anytime soon. News that China and the U.S. have officially agreed on the details of the phase one trade deal sent stocks into positive territory for the week. Action in stocks was choppy following a trade deal resolution Thursday in part because little details were given to the public. The tariffs scheduled for Sunday were canceled and some existing U.S. tariffs on China products were reduced. China essentially agreed to buy a lot of soybeans.

Nothing is legally signed for the phase one deal but the win for the economy is an exchange of yeses between the two nations. The trade war has for a long time now been a concern for the health of the global economy so a step forward has erased a lot of concern for the future. Some investors are still wary especially with elections in the U.S. coming at the end of 2020 on top of past fall outs on previous deals made between the nations during this trade dispute.

The I-fund outperformed the TSP funds for the week adding 1.72% on a combination of the trade deal as well as the results of the U.K. election which minimizes the uncertainty of Brexit and thus attracting money back into foreign markets. The S-fund just made it through the week with gains as the fund lagged the other TSP funds with a 0.06% gain

Economic data to be released will be next to draw the attention of investors. All of previous worries are out of the way so the effects so far on the economy will be a telling sign of what is to come.




Here are the weekly, monthly, and annual TSP fund returns for the week ending December 13th:




The SPY (S&P 500 / C-fund) traded tight early in the week and nearly filled the open gap from last week. Trade news initiated higher volatility for the last two trading days of the week to produce new highs intraday but a sell the news reaction and lack of public details on the phase one deal had the index giving up gains. The C-fund finished the week up 0.77%.



Steep rising trends held but the index is back above the trend line produced from the previous peaks of 2019.




The Dow Completion Indices (S-fund) filled an open gap from the previous week but when large caps were rallying, the index was kept at bay by the highs established last month. The S-fund was down on Friday but was able to scrape by with a slight gain of 0.06% for the week.




EFA (EAFE Index /I-fund) rallied last in the week finally bursting above the flat resistance keeping the index trading sideways for a month and a half. The trade deal news was a catalyst but maybe more so was the results where Boris Johnson was elected and promised to finalize the controversial brext deal as soon as possible. The I-fund led the TSP funds for the week with a gain of 1.72%.




Headlines on trade had AGG (Bonds / F-fund) on the move this week. Volatility was high and the index hit its low Thursday only to jump up just below its highs to close for the week. The open gap below remained untouched. The F-fund gained 0.28% on 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
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