TommyIV's TSP Talk Blog

Stocks wrapped up an ugly month on Thursday before starting the new month and quarter with gains. Still all the TSP funds were down for the week with the I-fund taking the greatest loss. For the S&P 500, Thursday marked the biggest monthly loss since March 2020 and ended a five quarter winning streak. It seemed likely stock indices were set to perform their usual act and climb back to the highs after the previous week's string of gains, but alternatively unresolved pressures and a spike in bond yields sent investors into a selling spree to end the quarter. Tuesday was the greatest loss of the week for the C and S-funds, both were down more than 2% on the day. Both U.S. stock funds were down more than 3% for the week going into Friday where a new month and new quarter gave life to new buyers and both funds were up more than 1% on the day.

There wasn't any major news to tie to stock performance. Congress did avoid a government shutdown but are still negotiating a deal to raise or eliminate the debt ceiling to avoid defaults on debt. A consumer spending report on Friday showed an increase of 0.8% from the previous month. The Federal Reserve's promise to tighten monetary policy soon along with the persisting high inflation sent U.S. Treasury bond yields higher this week which not only drove bond prices down mid-week but put pressure on the index heavy weight tech stocks. The NASDAQ fell 3.2% for the week. Yields retreated Friday as stocks regained their own traction.

October started with more than 1% gains in stock indices and the month is notoriously known for volatility. That is not to say October is a weaker month but it rather is the start of the typically strongest six months for stocks; October through March. The C-fund is now 3.88% off its high produced on September 2nd but was down just shy of 5% at Thursday's close from that high. Is this the correction analysts have been waiting for? Are stocks set to climb higher with a bit more healthy technical set up? Or is this the beginning of a deeper correction? The problem analysts have had with the thought of further correction is the lack of better option for a return outside of stocks. And like said above, this is the beginning of the seasonally averaged best six months for stocks.

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Here are the weekly, monthly, and annual TSP fund returns for the week ending October 1:




The SPY (S&P 500 / C-fund) gapped down Tuesday and opened below its 50-day which would mark its high for the day as well as the next four days. Intraday lows from the Friday two weeks prior held as support for Thursday's losses. Friday the index dipped lower approaching descending support from the dips of August and September before rallying the rest of the day to regain 1.15% of the week's losses. The C-fund lost 2.19% for the week and ended September down 4.65% for the month.




The Dow Completion Index (S-fund) slipped down to its 20-day EMA once again for September and again the index did not slip below the moving average. The index slipped 2.53% on Tuesday alone which put the price below its 50-day EMA where it would remain for the rest of the week. A 1.32% gain Friday lifted the index from potentially losing more than 3% on the week and instead ended the week with a 1.81% loss. The S-fund ended September down 3.09% for the month.




EFA (EAFE Index / I-fund) lagged the TSP funds this week with a loss of 2.55% after posting a slight loss Friday while the U.S. stock indices rallied. The index produced an open gap this week but the sell-off and lows Friday closed an open gap from July. The I-fund was down 2.81% for September.




BND (Bonds / F-fund) gapped down Tuesday as yields jumped higher. This put the index below its 200-day EMA for the first time since June. That gap was closed Friday as the index gained 0.29% on the day and closed back above the 200-day EMA. The F-fund fell just 0.11% for the week and lost 0.40% in September.




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

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