TommyIV's TSP Talk Blog

Nowhere to hide outside of the G-fund. A failed deal between Russia and Saudi Arabia resulted in significant drop in oil over the weekend; an unforeseen addition to the market turmoil already stirred by the coronavirus outbreak. The sell-off at Monday's open was severe enough to initiate a circuit breaker trading halt for the first time since 1997. The pain was not over for those who didn't retreat already. The sell everything wave picked back up Thursday as fear of the unknown had investors wanting out of markets. Even stimulus from the Federal Reserve led to stocks fading to lower lows for the day. Finally investors recognized stocks as oversold and bought them back particularly the last hours of the trading day. The C-fund gained 9.31% on Friday alone. But the sell-off had its toll over the week and significant damage was done despite the buy back.

Bonds also joined the sell-off rather than continue to be the safe haven for investors. Panic has investors selling everything for any reason. The dollar has spiked this week which minimizes the purchasing power of bond returns. A possible reason among many to keep investors retreating. The F-fund fell 3.18% for the week.

It was a historic week for markets and its unknown if the potential economic damage of the virus is priced in. Two weeks ago many were calling a bottom and now we're seeing greater losses and volatility. By technical definition, the 11 year bull market died this week. What implications that has on the investor psyche is unknown. Headlines and numbers will continue to drive emotions but we know the Federal Reserve and the Trump Administration will combating an economic downfall.

The S-fund lagged the TSP funds with a loss of 15.55% for the week.




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




The SPY (S&P 500 / C-fund) gapped down again to start the week. The index gapped down again Thursday but a rally Friday filled that gap. There is an established steep falling resistance since middle of last week which marked the highs on Friday. The C-fund fell 8.75% for the week.




The Dow Completion Indices (S-fund) lagged again this week and unlike SPY the index has now traded below the lows of the late 2018 sell-off. All gaps were left open and prices seemed to be in a free fall; falling harder than large caps and having lesser recovery rallies. The S-fund was down 15.55% for the week.




EFA (EAFE Index /I-fund) also fell below prices of late 2018 and more. A year of a struggled climb has been wiped in weeks. The I-fund fell 14.82% for the week.




AGG (Bonds / F-fund) fell with stocks this week after consistently being the destination for stability in a turmoil environment. The index fell below its 200-day EMA Thursday but was able to trade back above it Friday when bonds were up with stocks.



AGG fell to prices not seen since July where the index was flat. The bounce on Friday peaked at about the resistance level of the last half of 2019.




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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