TommyIV's TSP Talk Blog

Stock indices had their worst weekly performance since the pandemic driven sell-off in March. Well here we are seven months later and the pandemic's potential effect on the economy continues to control the market. New cases are surging and the market's worst fear of more economic shut downs are beginning to manifest.

If COVID was not enough to induce selling, there is more uncertainty of the outcome of the election next week than ever. Not only does the market carry the weight of a tight race with no obvious winner, but the expectations of a disputed outcome. The way in which we vote has changed and there is a lot of uncertainty of how quickly the election results will take along with how voters and those in the running will accept the results. Markets are not comfortable with this and do not thrive in uncertain times. The investor will likely step aside through unknowing until the future seems more stable.

Could this be the start of a similar stretch of selling in February and March. It is possible. Even decent earnings reports and outstanding GDP growth could not get buyers to jump into stocks. If so remember what you learned through February and March. Emotion does not make you money. Know that what ever your choice of allocation during the upcoming uncertainty that the haze will eventually ascend and buying opportunities and growth potential will again present themselves.

Monetary stimulus out of congress may be coming together but brings potential of increased inflation. Bond prices may be affected by this as the demand for a higher yield to combat inflation brings down bond prices. The F-fund fell into negative territory after giving back gains produced earlier in the week.

All three TSP stock funds were down more than 5% for the week and only the S-fund came out of October with gains (0.50%).




Here are the weekly, monthly, and annual TSP fund returns for the week ending October 30:




The SPY's (S&P 500 / C-fund) accelerated the its selling this week falling below the support line of its falling trading channel. In the process an open gap from late September was filled. The index did not reach the lows of September or 200-day EMA. These may be potentially goals for the index to establish support. The C-fund fell 5.62% for the week.




The Dow Completion Index (S-fund) gapped down Wednesday and fell below its 50-day EMA once again. There is an unfilled open gap just below the current price. It seems the top of the gap may have been support on Friday. The S-fund lagged the TSP funds for the week with a loss of 6.24% for the week.




EFA (EAFE Index /I-fund) fell out of range this week as global markets are once again being affected by another wave of the virus cases. Shut downs have began to take place in Europe that has become the new epicenter for the virus.



This weeks sell off pushed EFA below its 200-day EMA for the first time since June. This may be the start of a change in character of an index that has been relatively stagnant for months. The I-fund fell 5.50% for the week.




The BND (Bonds / F-fund) saw some early gains in the week where its 20 and 50-day EMAs were traded around. Like earlier in October the momentum could not hold and the index fell in the late half of the week to give back the gains and end just below even for the week. The F-fund was down 0.04% 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
www.tsptalk.com
Weekly Wrap-Ups Archive
Facebook | Twitter

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.