TommyIV's TSP Talk Blog

Divergence between the TSP stock funds gives gains to the C-fund while the S and I-fund slip for the week. The large companies that make up a large portion of the large cap indices have been the out performers lately and they are carrying the index higher. Small caps/S-fund reflect the action of the majority of stocks. Inflation concern have been set aside for now while investors rather reap the benefits of an expanding economy recovering from the pandemic woes.

That was seen throughout the week with a couple economic reports showing life in jobs and production in the U.S. but the big report was the June jobs report that came out Friday morning. 850,000 jobs were added last month which was the largest boost in 10 months while unemployment rose slightly. The rise in unemployment has been pointed to the number of able workers who were previously on the sidelines and are now looking for work during the labor market recovery.

Coming into this week it was the S-fund that had outperformed and had finally caught up to new highs. But that changed this week with the index declining four of the five trading days. This could be a mix of profit taking from a quick gain and rotation to the large cap tech names that are the current hot commodity and are carrying the C-fund to new highs. Now the situation is a little reversed with large caps extended and small caps with room to catch up to the recent established highs.

Bonds ran up to their recent highs this week and outperformed the S and I-fund with a 0.56% gain. The C-fund outperformed the TSP funds with a 1.70% gain. The S and I-fund were both down on the week.

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Here are the weekly, monthly, and annual TSP fund returns for the week ending June 25:




The SPY (S&P 500 / C-fund) was trading just below rising resistance for the first half of this week producing new highs along the way. The index broke above that resistance Thursday and then rallied higher Friday following the June jobs report. The index gained 1.7% for the week and is up 1.3% in just the first two days of July.




The Dow Completion Index (S-fund) fell four of the five trading days this week including Friday with no boost from the jobs report. There may have been some rotation out of small caps and into large caps with the tech names carrying the indices. There is support not far below the current price of the index and there seems to also be a bull flag formed from this week's action. The index pulled back mid-June before its impressive run in the second half of the month. The S-fund fell 0.6% on the week.





EFA (EAFE Index / I-fund) fell right back below its 20-day EMA to start the week and eventually was back below its 50-day EMA intraday Wednesday and Thursday after gapping down Wednesday. The index gained 0.27% Friday and topped off at the top of the open gap produced Wednesday leaving the current price between the 20 and 50-day EMAs. The I-fund fell 1.1% for the week to lag the TSP funds.




BND (Bonds / F-fund) traded gradually higher this week and a rally Friday put the index at the bottom of the open gap left open from February. The index pulled back mid-June after reaching this price area. The F-fund outperformed the G, S, and I-funds for the week with a gain of 0.56%.





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
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