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TSP Talk Weekly Wrap Up

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A second consecutive week of gains demonstrates the bull's resilience. The week began with a higher open but market's direction was not uniform day to day. The ongoing assessment of risk produced choppy action throughout the week; the S&P 500 even dropped sharply to negative territory early Thursday but quickly turned around into a rally that kept course for the rest of the week. Virus cases continue to add up in particular states threatening another economic shutdown. Investors are also beginning to speculate where they want to be ahead of Q2 earnings coming up. The second quarter earnings are expected to be more troubling than the first quarter which had the advatage of weeks of a hot economy to hold onto. The second quarter will show the full effect of the economic slowdown.

Despite those two weights (more virus cases and upcoming earnings), the bulls kept the ball rolling for the second week. Prices are still below the June highs by a fair amount but stock indices remain afloat with every reason to sink. A big win the bulls had this week was the news from Gilead that they were producing treatment that may shrink to the death rate of covid-19. The market was quick to celebrate that news.

The Federal Reserve and more stimulus from the federal government keeps investors confident. Some investors would even love to see a big pull back so they could get unused cash in markets at a discount. Of course that sentiment itself will keep the market buoyant thanks to dip buyers. But like we talked about last week, the market is in a summer trading channel and has spent its fair share of time at the highs of that trading channel. We have a couple weeks before we start getting into the meat of earnings and it will be a battle of investors fleeing injured companies and investors looking for good deals on stocks.

All of the TSP funds were up for the week with the C-fund leading with a gain of 1.79%. The F-fund keeps adding gains each week but came off its high of around 0.50% Thursday to finish up 0.40% for the week.

Here are the weekly, monthly, and annual TSP fund returns for the week ending July 10th:

The SPY (S&P 500 / C-fund) took the previous week's race to resistance and traded at that higher half of the trading channel. The open gap from mid-June was officially filled but the top of that open gap was the peak of the week's price range as well as where the index closed for the week. It would be sensible for the market to pull back from here but any good news will keep buyers interested. The index may not have had a repeat of the previous week but the quick rebound off the pullback Thursday was a demonstration of the eager money waiting to get to work. The C-fund was up 1.79% for the week.

The Dow Completion Index (S-fund) peaked at the beginning of the week but found support at its 20-day EMA Thursday. The strength of support is putting pressure on resistance. Overall the index looks to be in good shape but the news surrounding small cap stocks give another story. Earnings will be on the way to shed light on what the next move for investors should be. But the support of the Fed may turn bad earnings numbers into buying opportunities. The S-fund was up 1.55% for the week.

EFA (EAFE Index /I-fund) lagged the TSP U.S. stock funds for the second week. A decent beginning to the week turn lackluster from there. An open gap was filled and the 20-day EMA held as support but the rebound Friday did not par with the U.S. indices. The I-fund was up 0.32% for the week to lag the F-fund.

The BND (Bonds / F-fund) climbing range was broken Thursday to the upside where the gains for the fund peaked around 0.5%. The index pulled back into the trading range Friday giving back .1% in gains to end the week up 0.40%.

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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Updated 07-11-2020 at 02:23 PM by TommyIV

TSP Talk Weekly Wrap Ups


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