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TSP Talk Weekly Wrap Up

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Stocks produced their second week of gains in the face of the coronavirus which has yet to be contained; but investors seem confident it will be. Stock prices jumped to higher highs this week but the day to day action was choppy and inconsistent. Poor opens turned into rallies and strong opens faded, but the net result were gains over 1% in the U.S. stock indices. Jerome Powell couldn't reassure investors about the projected impact of the coronavirus or the Fed's course of action in response. It seems market players must be pricing in the future containment of the rampant virus and the Fed's relief stimulus to any economic impact left behind. Those assumptions come from past experience with similar outbreaks and the dovish reputation of the Federal Reserve.

Unreasonable has been a common term used to describe stock index prices over the last few months. That term became even more fitting this week when what seems the most obvious catalyst to draw a pullback in stocks conversely has them producing new all time highs. The resilience of this market is impressive and truly displays the fact that it has a mind of its own. Earnings have been given credit for keeping buyer's spirits up through the coronavirus headlines so far. Earnings are now coming to an end so either buyers will be desperately looking for a reason to buy or analysts will be desperately looking for the reason investors keep buying.

Bonds were flat for the week but bounced back from early losses as stocks flattened out late in the week. There is enough potential of the worst to keep safe investment afloat while stocks continue to rally.

The S-fund led the TSP funds with a gain of 2.46% for the week. The I-fund lagged with a slight loss of 0.03%.

Here are the weekly, monthly, and annual TSP fund returns for the week ending February 14th:

The SPY (S&P 500 / C-fund) remains to trade within the trading channel that has prevailed since October. New highs were made this week and now the price sits in the middle of the trading range. The long weekend will give investors a chance to evaluate prices with expectations. The C-fund was up 1.65%.

The Dow Completion Indices (S-fund) broke above the confinements previous highs. A gap from the previous week was closed but another was opened Tuesday when the index gapped up for the open and did not pull back from there. The S-fund outperformed the TSP funds with a gain of 2.46% for the week.

EFA (EAFE Index /I-fund) jumped around this week to eventually settled just below where it closed the previous Friday. Foreign markets are being more directly affected by the coronavirus leaving the I-fund to lag the other TSP stock funds. A bear flag has formed but since the action in the months prior was an uptrend its less technical justification for the bear flag to break down; however still possible. The I-fund dropped 0.03% for the week.

AGG (Bonds / F-fund) fell mid-week while stocks were being bought but bounced back late in the week to regain the losses. The top of the open gap seemed to hold as support instead of the index filling the gap. Still two gaps sit below the current price of AGG. The F-fund was up 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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