TommyIV's TSP Talk Blog

Stocks were up to start the week but the general downward trend eventually pushed the TSP stock funds into negative territory for the week. It was the second week of losses for the C-fund and the fourth straight week of losses for the S-fund. The S-fund has taken most the damage without the large cap names to hedge against the broad sell-off across small cap businesses. The S-fund is down more than 11% since producing its last high on November 8th. A 10% loss in an index is considered a correction by definition. Although arbitrary it may attract new buyers looking for bottom. In the same time span the C-fund has only lost a bit more than 3%. This is not a correction and the S-fund lost more than that just this week. It is telling to how the large cap names some investors consider safety buys have been able to keep the index price afloat while the broad market slips beneath the market behemoths.

Tech giants did sell-off this week; the Nasdaq was down 2.6% for the week. If these tech giants don't hold their status as a safe investment in a volatile market we may see rotation out of large caps and into small caps if small caps can establish a bottom.

Two things are weighing on stocks lately: The Federal Reserve and the Omicron covid variant. Both threaten to slow down economic growth. The Federal Reserve is finally publicly recognizing inflation is not something that can be simmered down on its own. We've seen some hawkish behavior out of the mostly do nothing and wait Federal Reserve leaders. They are dropping the word transitory when talking about inflation and are discussing a speed up of the bond purchasing program so they can pave the way to raise interest rates sooner than later. Their reasoning is sound; they need to slow the economy to allow supply to catch up to demand to put an end to the growing inflation that is much past their benchmark goal. However, investors who have their money on the success of the economy are not as on board. So naturally we see selling for now until those investors realize there is not many better options to put your money for the same return.

The Omicron covid variant threatens economic growth on a more global scale. So far, the variant has spooked markets to the greatest degree since the February 2020 sell-off of the original covid scare.
The November jobs report showed a slowdown in the labor market's comeback. 210,000 jobs were added while expectations were 573,000 jobs. This was the smallest monthly gain since December of last year.

Bonds were added a half percent this week while stocks sold off.

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Here are the weekly, monthly, and annual TSP fund returns for the week ending December 3:




The SPY (S&P 500 / C-fund) fell below its 50-day EMA this week and traded back and forth around it before eventually settling below it for the week. The index was down 1.18% for the week but it was up from its lows and the end of the trading session Friday. The index does have an open gap from October below but has kept the sell-off at bay compared to the S-fund's last month's performance.




The Dow Completion Index (S-fund) has continued to sink for the fourth straight week and is now more than 11% down from its highs on November 8th. The index traded below its 200-day EMA for the first time since April 2020. The last time it moved below it was the sell-off of February of 2020. The 200-day EMA even acted as resistance Thursday and Friday which eventually sent the index to just above Wednesday's lows. The index was down 4.89% for the week.




EFA (EAFE Index / I-fund) was down but not to the degree of the C and S-fund. The index remained below is 200-day EMA for the most part of the week and failed to fill that open gap above after Wednesday's reversal. The I-fund was down 0.44% for the week.





BND (Bonds / F-fund) moved higher this week with most of its weekly gains coming from Friday's action. The ETF moved above its 50 and 200-day EMAs on Tuesday and remained above them for the rest of the week. Friday the index jumped 0.38% and was just short of the November highs. The F-fund was up 0.50% to outperform the other TSP funds.





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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