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TSP Talk Weekly Wrap Up

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Stock had a volatile reaction to the FOMC meeting this week that ultimately led to deeper losses in the indices. The Federal Reserve raised interest rates this week by 0.5% for the first time since 2000, and it was their second consecutive meeting where they raise rates. Stocks soared following the FOMC press release. It was an emotional reaction to something that wasn't unexpected. The market had seen this coming weeks in advance yet it triggered a buying frenzy as a result of pent up investors looking for a reason to react. Both the C and S-fund were up more than 2.5% on Wednesday, the C-fund ended the day up 2.99%, putting both funds up more than 4% for the week. The excitement was short lived and profit taking erased all the week's gains the following day. The C-fund fell 3.55%, and the S-fund fell 4.47% Thursday.

Friday brought more losses to the stocks funds but it was the S-fund that suffered the worst. The S-fund settled for a 2.58% loss for the week. The large cap C-fund remained near even Friday but eventually ended with a 0.18% loss for the week. The C-fund has now recorded five straight week's of losses. This week was the S-fund third consecutive week of losses.

Investors are concerned about the quick rise in rates effect on economic growth. The Federal Reserve's borrowing cost now sit at a range of 0.75% - 1.00%. Former Vice Chairman of the Federal Reserve Richard Clarida estimates the Fed will need to raise rates to at least 3.5% to reach the Federal Reserve's goal of taming inflation. Will the market keep falling until that comes to fruition? Likely not. The stock market is priced off of future projection. Think about the market's quick and aggressive comeback in April of 2020 while the pandemic was still in full swing. When that will take place is the million dollar question.

There are a few ways to go about a bear market: You take advantage of low prices and keep putting money into stocks, you step aside and collect the yield of the G-fund until the market shows consecutive strength, or roll with the punches and attempt to time the swings of this volatile market to put together a better return than any one stock fund. 237 non-premium TSP Talkk AutoTracker members are currently outperforming the C-fund for the year, which includes 30 members who have not left the G-fund all year. Paying attention and positioning yourself correctly can pay off. Its been a rough year for the buy and holder; the S-fund is down more than 20% this year.

Looking for an edge on your TSP return? Get the Last Look Report for as low as $4.19 / month. The report is a daily email on the TSP AutoTracker moves, news, forum threads, and more before the IFT deadline. The service is aimed to help you make your own IFT decisions by giving you relative information 30 min prior to the deadline including where the members of TSP Talk are moving their money.




Here are the weekly, monthly, and annual TSP fund returns for the week ending May 6:




SPY (S&P 500 / C-fund) rallied Wednesday but topped off at its 20-day EMA which would be the high for the week. Prices dropped back to the lower lows produced from Monday's performance. The C-fund ended the week with a loss of 0.18% which was considerably modest when compared to more than 2% losses in both the S and I-funds.




The Dow Completion Index (S-fund) was also limited by its 20-day EMA on Wednesday's rally. The bulls could not keep this index near even for the week and the S-fund fell to 2.58% loss for the week after the fund fell 2.17% on Friday.




EFA (EAFE Index / I-fund) again saw its highs at the 20-day EMA before giving back all the gains and slipping into negative territory. Like the S-fund, the I-funds losses built up to a 2.21% loss for the week sending the fund close to its low for the year.






BND (Bonds / F-fund) was up with stocks mid-week but slipped Thursday and Friday and ended the week with a 1.09% loss to lag the C-fund. This chart isn't pretty and could continue this stretch from the top left to bottom right for some time.





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
Last Look Report
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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)

(Stockcharts.com Real-time)
EFA (I Fund) (delayed)

(Stockcharts.com Real-time)
BND (F Fund) (delayed)

(Stockcharts.com Real-time)

Yahoo Finance Realtime TSP Fund Tracking Index Quotes