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TSP Talk Weekly Wrap Up - The End of the Buying Spree

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Stocks prices started the week down slightly on Monday, but actually rallied from Monday's TSP trading deadline to Tuesday's TSP trading deadline. This was the continuation of a buying spree that started the previous Friday. The Market was dealing with headlines about a new war in the Middle East which made it surprising to see prices climb so easily. But the momentum was cut there near the Tuesday trade deadline and stalled over the next two days.

The indices started to give back some or all of the week's gains on Thursday when the latest Consumer Price Index (CPI) showed inflation was steady and higher than the Fed wants it to be. The higher-than-expected CPI tells the market the Fed may be willing to hike rates again before the year ends, putting more pressure on the economy.

But as it stands, there is only a 6% chance of the Fed raising rates in the November 1st meeting.

The market will have earnings to react to in the two weeks leading up to the November Federal Open Markets Committee meeting. Earnings started this week with the larger banks reporting earnings first. Their numbers for the third quarter were better than expected but the market had a tough time buying into them or the broader market because of the pessimistic projections for the next quarter that came with them.

Banks do well in higher rate environments, so if banks are seeing trouble ahead then their fear may be directed at the economy itself.

The F-fund outperformed the TSP funds this week with a gain of 0.97%. On the other side, the S-fund lost 1.03% for the week.

Here are the weekly, monthly, and annual TSP fund returns for the week ending October 13:

The SPY (C-fund) pulled back at Monday's open but that turned out to be the low of the week for the ETF. Prices rose Monday afternoon and continued onto Tuesday where the ETF about reached its highs for the week intraday. Prices jumped around in a tighter range in the second half of the week, but the momentum was killed officially after Thursday's Consumer Price Index report. Large caps pulled back on Friday but were able to maintain a gain for the week. The C-fund was up 0.47% for the week to outperform the other stock funds.

The small cap index DWCPF (S-fund) was not able to stay in positive territory for the week. The index's prices rose up to the 200-day EMA before momentum flipped for the week. The index gave everything back and more through Thursday and Friday's action. The current price is not far from the October lows established in the previous week. The S-fund fell 1.03% for the week to lag the TSP funds.

Bonds got a boost to start the week as they gapped up higher at Mondays open. Bond prices rose further and never came back down to fill that open gap as the week progressed. The price fell to match the top of the open gap on Thursday, but it ultimately held as support and the price bounced up again. The F-fund ended the week with a gain of 0.97%, this was the best return among the TSP funds for the week.

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 TSP Talk - Market Commentary. If you need some help deciding what to do with your account, perhaps one of our premium services can help.

Thomas Crowley
Weekly Wrap-Ups Archive
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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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