TSP Market Summary: Week of August 24, 2019
Key Takeaways
- Trade war escalation wiped out six days of stock market gains in a single Friday session
- F fund reached new record high as investors flocked to bonds for safety amid uncertainty
- Fed Chair's unclear rate cut signals caused yield curve inversion, adding market stress
Recommended Allocation (Moderate Profile)
This is our historical recommendation from this date. For current recommendations, subscribe.
| G Fund | F Fund | C Fund | S Fund | I Fund |
|---|---|---|---|---|
| 15% | 60% | 25% | 0% | 0% |
The trade war escalated Friday with the U.S. and China implementing new tariffs, and culminated with a Trump tweet "ordering" American companies to find an alternative to China operations. As a result, the markets gave up six days of gains and fell back to where it was last Thursday, closing at 2847 again. In other news Friday, Fed Chairman Powell released a statement from the annual central banking symposium in Jackson Hole that didn\'t give a clear suggestion of a rate cut in September which caused another brief inversion of the yield curve. For TSP TIPS, the strong demand for the safety of bonds resulted in the F fund hitting a new record high and leading all funds in performance ranking. Taking advantage of that bond demand while taking a more defensive equity position, we recommend the following reallocation.