TommyIV's TSP Talk Blog

The oil price collapse brought stocks down early in the week but a display of buyer resilience erased most of the early losses. Demand in oil plummeted while supply remained developed from the strong economy before the pandemic. The price of oil contracts had their worst sell-off in history spooking market participants early in the week. Cash holders quickly regained their attraction to stocks and the early losses were nearly erased in the S-fund and about 3/4th of the losses were reclaimed in the C-fund by the end of the week. Bad news just isn't what it once was and although stock indices are not thriving, they remain contenders against what may be the worst economic downfall of our lifetimes.

Stimulus by big banks and the government has seemingly been the life support of stock investors and another stimulus bill for small businesses was signed through legislation Friday. New cash continues to flood the economy but we are sailing deeper into earnings. The resilience of buyers so far has been impressive and its questionable at this point what is capable of breaking the spirits of dip buyers and those cash holders who want back into equities. But its also difficult to believe stocks are reasonably priced in the face of what many think is possibly the current age great depression. It makes little sense that the S&P 500 is trading at the same price as the middle of 2019 when the economy was firing on all cylinders.

Bonds outperformed this week with a quarter percent climb in the F-fund while all the TSP stock funds were down for the week.

Earnings will be coming in thick next week and there is a FOMC meeting but there is nothing big expected from the Fed this time around.




Here are the weekly, monthly, and annual TSP fund returns for the week ending April 24th:




The SPY (S&P 500 / C-fund) fell back below its 50-day EMA Tuesday leaving an open gap in the process. The test of the 20-day EMA Tuesday marked the lows for the week. The gap was filled the next day the index traded most of the week back above the 50-day EMA. A rising trend line was broken below and even held as resistance during multiple days. That trend line moves higher as we move forward but the 200-day EMA is certainly a technical obstacle for the bulls. The C-fund fell 1.3% for the week.




The Dow Completion Indices (S-fund) fell to its 20-day EMA Tuesday but was able to reclaim most of the losses from the early sell-off by the end of the week. The support below the 20-day EMA includes a rising trend line of recent lows. The S-fund lost 0.19% for the week.




EFA (EAFE Index /I-fund) did trade below its 20-day EMA Tuesday but with the other stock indices it climbed back the last half of the week. The index has yet to test the 50-day EMA although it has traded within reach for the second half of April. The I-fund lagged the TSP funds this week with a loss of 1.49%.




AGG's (Bonds / F-fund) trading range grows tighter and tighter following the unprecedented swings in the index caused by the liquidity crisis in March. Not too much movement this week but the F-fund did move high by 0.27% to outperform the other TSP funds.




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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