TommyIV's TSP Talk Blog

Investors continue to buy up stocks as they approach pre-pandemic levels. The S&P 500 produced its 6th consecutive day of gains Friday after a late surge the last couple hours of trading pushed the index out of negative territory. Positive earnings in smaller stocks and a jobs report that outdid expectations had money moving to stocks, particularly small caps. There was rotation out of large cap names and into small caps especially towards the end of the week. The Nasdaq produced a loss Friday to end its winning streak due to this rotation. This made the S-fund the outperformer this week among the TSP funds.

The potential for a failed deal for more fiscal stimulus threatens the enthusiasm of investors. Fiscal stimulus has been the fuel to the economic and especially the market recovery. The second wave of stimulus to consumers has been in the air for some time and is certainly already priced into markets. A failure to get any stimulus out to the public would not be something the market could ignore.

Next week economic data will have the attention of investors. First will the consumer price index numbers on Wednesday. This will give an idea of how all this new money is affecting product prices. Retail numbers come Friday and we will see what consumers have been spending using that stimulus money.

All the TSP funds added gains for the week. The S-fund outperformed with a 3.53% gain. The F-fund lagged with a slight gain of 0.11% for the week.




Here are the weekly, monthly, and annual TSP fund returns for the week ending August 7th:




The SPY's (S&P 500 / C-fund) gains this week pushed the index just about to the highs before the pandemic sell off in February. This is obviously a very important marker for this index and the passing of a stimulus bill will be essential. The index lagged small caps which as we mentioned is a rotation from the overextended large cap names to the value stocks that have potential for growth given the economic recovery stays on track. The C-fund was up 2.49% for the week.




The Dow Completion Index (S-fund) extended into the open gap from the initial sell off in February. The S&P 500 was able to move past its gap once filled so that is a possible precursor to how the small cap index will react if things go well. The S-fund outperformed the TSP funds this week as the beneficiary of value rotation and small cap earnings. The S-fund gained 3.53% for the week.




EFA (EAFE Index /I-fund) underperformed the U.S. indices but was able to add 1.95% for the week. This is good news for the index which took a loss the previous week due to concerns of a second wave of infections in the some of the economies that the index represents.




The BND (Bonds / F-fund) continued its climb higher but a loss on Friday cut the week's gains to 0.11% The trading channel support of late June and most of July continues to hold as resistance for another 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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