TommyIV's TSP Talk Blog

Stock prices got a boost from Jerome Powell this week. A post-holiday hangover along with protests in China over zero Covid policies deflated stock prices early in the week. Both the C and S-fund were down more than 1.65% by the end of Tuesday. Investors had their sights on Jerome Powell's speech on Wednesday. The Fed Chairman isn't known for being accommodative to stock markets, so buyers were not lining up to be exposed before he spoke. But Powell did say what the market wanted to hear. Powell validated the markets hopes and suspicions that the Fed is ready to lower its pace of rate hikes starting in the December FOMC meeting. Take a look at the chart below and try to guess when he said this. Stock prices took off higher immediately and didn't slow down the rest of Wednesday.

Powell also mentioned the labor market needed to cool more for the Fed to be confident inflation will continue to decline. So of course, the November Jobs report scheduled for Friday became investors' number one focus. The report showed the jobs market remains tight, job additions remain steady, unemployment remains low, and wages are growing. This sent stocks down early with the 'good news is bad news' reaction. But most or all of Friday's early losses were erased after prices rebounded through the trading day. For now, buyers are still interested, and some expect there is plenty of growth opportunity ahead. The market is still trading on idea that inflation has peaked but seems a bit ignorant that inflation will remain high for a while and the Fed is still raising rates even if its pace may slow.

All TSP funds outside of the G-fund were up more than 1% for the week. The I-fund outperformed overall for the fifth straight week.

The Producer Price Index (PPI) will come out this coming Friday giving investors opportunity to fixate on inflation again. The next FOMC meeting is the following week. The probability of a 0.50% rate hike over a 0.75% rate hike is currently 78%


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Here are the weekly, monthly, and annual TSP fund returns for the week ending December 2:




SPY (S&P 500 / C-fund) pulled back below its 200-day EMA Monday and Tuesday and the once hopeful technical set up was beginning to look gloomy with a failed attempt at filling the September gap. Jerome Powell helped put the a spark back in the chart. His speech sent the ETF back above its 200-day and filled the lingering September open gap in half a day. The C-fund pulled back the slightly over the next two days but a gain of 1.19% remained for the week. The C-fund lagged the TSP funds outside of the G-fund.




The Dow Completion Index (S-fund) had success this week but unlike SPY it did not fill its September open gap or surpass its 200-day EMA. Now the bottom of the open gap is at the same price as the index's 200-day Simple Moving Average. The index remains between two open gaps and is also bound by the support of its 50-day EMA and the potential resistance of its 200-day SMA. The S-fund was up 1.60% for the week.




The I-fund (EAFE Index /EFA) has now led the TSP stock funds for the fifth straight week. The greatest hurdle for EFA looked like it would be the August highs. The ETF did pull back slightly in the first days of the week but jumped up with U.S. stocks on Wednesday and added to those gains on Thursday. The I-fund gained 1.66% for the week.





BND (Bonds / F-fund) was up more than 1% for the second straight week. The expanded its trading range from the previous week but the trajectory remained the same. The F-fund gained 1.45% for the week to outperform the C-fund.




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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