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TSP Talk Weekly Wrap Up

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U.S. stock indices were pushed higher on the shoulders of technology giants. The final of the big tech names reported earnings this week and news was not sold. Underlying companies in stock indices, particularly in industrials, underperformed while the money flowed to Apple, Amazon and Facebook; but the sheer size of the tech companies outweigh the negative effects on the indices. Data of record breaking economic contraction in the second quarter was also overshadowed by the tech earnings success. There are many more earnings reports to come next week but the big names are past us.

Looking at the chart below we see the S&P 500 had numerous swings throughout the week. The volatile movement is a result of low volume trading and emotion. A late rally Friday solidified the gains for the week which were over 1% for the U.S. indices. Emotions have kept the market afloat while plenty of risk still exists. Optimism reigns and those who think rationally about the market have been punished since late March. Stocks are trading at or above pre-pandemic levels and we are still in that pandemic. Stocks are priced for a post-pandemic economy but its unclear how far out that really is and how much longer the indices can carry that positive sentiment; longer than seems reasonable.

Foreign markets fell this week to bring a loss of more than 2% to the I-fund. We are seeing more outbreaks in economies whose companies carry the I-fund when those areas were thought to be through with the spread of the virus.

Bonds added 0.29% more for the week as the bond markets continues its steady climb higher.

Here are the weekly, monthly, and annual TSP fund returns for the week ending July 31st:

The SPY (S&P 500 / C-fund) ended the week higher than the last but the highs of the previous week were not surpassed. The support the index fell below the previous Friday held as resistance this week. The open gap from February still has not been filled since the index has trading within it for two weeks. The moving averages still give the index support below. The 20-day EMA held as support through all of July. The C-fund led the TSP funds with a gain of 1.76% for the week.

The Dow Completion Index (S-fund) was also up with large caps but while the index had underperformed for the week and the year, the S-fund outperformed in July. The February open gap has yet to be reached. The S-fund was up 1.69% for the week.

EFA (EAFE Index /I-fund) fell lower the last two trading days of the week and ended the week/month under its 20-day EMA. New outbreaks in was thought to be controlled countries that make up part of the EFA put pressure on the economies and the companies. The I-fund lost 2.11% for the week.

The BND (Bonds / F-fund) fell below its tight trading channel Monday but quickly resumed its steady climb from there. The index added 0.29% for the week. The month long support quickly turned to the resistance of the index 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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BND (F Fund) (delayed)

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