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TSP Talk Weekly Wrap Up

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It was a big week for stocks with big name earnings, the FOMC meeting, and economic data. The mix resulted in choppy action throughout the week and stocks finished mixed with large cap indices down and small caps flat. Decent earnings from Apple, Microsoft, and Alphabet were unable to spring stock prices higher. Amazon's disappointing earnings and forecasts put the stock down 7.6% Friday and the weight pushed the market down with it to solidify losses for the week in large caps.

The reception of economic data has been strange for the market. The promise of economic growth has driven markets higher since March 2020 and for the most part we are seeing that in the numbers especially in the second quarter. But the market also has its eye on the Federal Reserve and their desire to tighten monetary stimulus. The third aspect is the economic growth of the second quarter is unlikely to sustain for the rest of the year. For one, the economy is not getting fiscal stimulus like it was earlier in the year, and two, virus cases are rising now instead of declining as in the second quarter. Inflation remains a concern but even worse is the possibility of increased inflation along side a depressing economic recovery. Economic growth does not mean rising stocks; the promise of future economic growth tends to come with increase in stocks prices. There is a lot of uncertainty about that future at the moment all while indices are extended near all time highs. Something to think about.

The FOMC meeting came with no action from the Fed but the press conference following led those interested that the Fed has a better timeline of what and when it want to take action. The uncertainty of the new wave of virus infections puts the Fed in a different position from when the originally discussed tightening monetary policy. The action of the labor market and consumers will be watched very closely.

Bonds outperformed this week with a 0.24% gain in the F-fund. The S-fund was flat while the C-fund lagged with a 0.35% loss.

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




The SPY (S&P 500 / C-fund) produced new closing highs Monday but investors were unwilling to pay more during the rest of the week. Action was choppy and the index was in positive territory Thursday but disappointing earnings report from Amazon dragged the index down into negative territory for the week on Friday. The C-fund lagged the TSP funds for the week with a 0.35% loss. The C-fund outperformed for July with a 2.37% gain on the month.




The Dow Completion Index (strong>SS-fund) chopped around with large caps and even took a greater loss Friday but still managed to finish the week flat. The index momentarily fell below its 50 and 20-day EMAs but finished the week back above both. There is still room above before the pressure of competing highs. The S-fund broke about even for the week. The S-fund lagged the TSP funds for July with a 1.24% loss.





Similarly EFA (EAFE Index / I-fund) broke down from its weekly highs on Friday and to a greater degree than both the C and S-fund yet still managed gains for the week. The index had gapped up into Thursday but those gains were given back Friday. The index is above its 50 and 20-day EMAs. There is still an open gap below from the previous week. The I-fund added 0.07% for the week. The I-fund was up 0.72% for July.




BND (Bonds / F-fund) had its ups and downs this week but climbed up with the rising trend. The index did not finish at its highs but the rise was enough to outperform the other TSP funds for the week. The F-fund gained 0.24% for the week. The F-fund outperformed the S and I-fund for July with a 1.15% gain.





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

wwww.tsptalk.com
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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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S&P500 (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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