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TSP Talk Weekly Wrap Up

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The momentum in stocks gains decelerated this week with the pre-pandemic highs hovering above large cap prices. The S&P 500 fell shy from producing new highs and slid from the weekly highs to finish the week. This week's action gets us inside the collective mind of the stock investor. With a few bumps here and there, the stock market has produced its fastest recovery out of a bear market in recorded history. But as we are about to make new highs and put the mess behind us, one thing still lingers: the pandemic isn't over. The continued rise of coronavirus cases in the U.S. carries weight for those who would otherwise be happy to keep buying into the broad market. Rather than a collective retreat out of the market at its highs, there was rotation this week out of the big growth companies and into the value companies. This is a healthy move for a market in a vulnerable spot.

Other major factors on the mind of the collective investors are the lack of continued stimulus to fuel the recovery and the approaching elections. Congress could not make a deal before their break so those who in the need of more free money will have to wait. This could have an impact if the consumer can't put money into the economy. The election is now less than three months away and the collective investor has to decide where they want to positioned for any outcome.

Things are looking good for the market but not great. Bond interest rates rose this week which gives another option other than stocks to put money. More economic data will be on the way next week to give us a peak at the recovery.

The I-fund outperformed this week with a 2.46% gain while the F-fund fell 0.92% for the week.

Here are the weekly, monthly, and annual TSP fund returns for the week ending August 14th:

The SPY's (S&P 500 / C-fund) started the week with gains but once slowed it roll late in the week. The index flattened out mid-week and trading ranges tightened. The momentum is still on the rise as a whole and the index has plenty of support below started with the 20-day EMA.

The S&P 500 index found its highs of the week once it matched the highs produced just before the sell-off began in February. This will be a major obstacle for this index technically but the Nasdaq moved past it months ago. The C-fund rose 0.69% for the week.

The Dow Completion Index (S-fund) filled the open gap of the initial sell-off. The index is a step behind SPY so how large cap stocks deal with the double top may be a clue for the next move for this index. The S-fund was up 0.58% for the week to lag behind the C-fund.

EFA (EAFE Index /I-fund) led the TSP funds and significantly outperformed the U.S. stock funds. EFA had used the support of the 20-day EMA the previous week as a turnaround point. The index jumped up to hit rising resistance before giving back gains for the week. The I-fund was still able to add 2.46% for the week.

The BND (Bonds / F-fund) slipped out of its steady climb and gave back a month's worth of gains in the week. The index closed at the support of its 50-day that hadn't been tested for some time. This is a toss up between a top for the index or an entry point now that stocks are facing their own highs. The F-fund lagged the TSP funds with a loss of 0.98% 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 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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