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TSP Talk Weekly Wrap Up

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Investors ran to safer investments this week as the reality of the virus outbreak begins to seep through the cracks. Stock investors have been able to look past media hype of the coronavirus while putting their trust in central banks to stimulate the economy when needed. But when a couple U.S. companies, starting with the power house Apple, announced they won't reach revenue projections next quarter because of the slow down in China, investors were quick to retreat stocks and buy up government bonds, gold, and other haven investments. Accepting the truth of the virus impact on the global economy can be a good thing for markets. Denial could lead to devastating market action down the road.

Poor economic data released this week also contributed to the stocks late retreat. The S&P 500 was down more than 1% this week but is still within 1.4% of its highs. Bond markets and precious metals are also trading at long term highs which demonstrates a theme so far this year: Investors are split on economic outlook. Even stock utility sectors are performing well along technology sectors which usually mirror each other. We're seeing simultaneous aggressive and cautious investing. Who will be affected more if their wrong? Another theme this year is weak action on Friday's but that pattern has been coupled with strong bounce backs on following Mondays. Will the pattern continue or have sellers committed?

The F-fund outperformed the TSP funds this week with a gain of 0.57% while the TSP stocks funds were all in the negative for the week. The I-fund underperformed with a loss of 1.23%.




Here are the weekly, monthly, and annual TSP fund returns for the week ending February 21st:




The SPY (S&P 500 / C-fund) pulled back late in the shortened week. The index sold off early Thursday but was able to rebound off January's highs. That didn't hold to close out the week as stocks sold off again Friday but the 20-day EMA marked the low. A couple of open gaps sit below which are both above the 50-day EMA. The C-fund was down 1.22% for the week.




The Dow Completion Indices (S-fund) pulled back with large caps but not to the large companies extent. The index hovered above the January highs but never priced at or below. Similarly there are two open gaps below the price which one is intersecting with the 50-day EMA which the index has stayed above for the most part for months. The S-fund was down 0.3% for the week.




EFA (EAFE Index /I-fund) did fall below its 50-day EMA and nearly closed an open gap but rather found support in its falling trading channel. More obstacles above than below the current price giving the bears the technical advantage in the short-term. The I-fund lagged the TSP funds with a loss of 1.23% for the week.




AGG (Bonds / F-fund) was trading into the apex of a wedge this week with one option to pull back and fill the open gap below. But the continued distress on the global economy due to China's pause on a lot of business had investors seeking safety late in the week. The index gapped up Friday but closed near its lows after producing higher highs. The F-fund led the TSP funds with a 0.57% gain 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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S&P500 (C Fund) (delayed)

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DWCPF (S Fund) (delayed)

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EFA (I Fund) (delayed)

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BND (F Fund) (delayed)

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