The S&P 500 broke the 3200 threshold this week closing at 3221 Friday. The “Good News Trifecta” mentioned last week continues. On Friday, consumer spending was reported as growing at 3.2% for the third quarter which further confirms U.S. economic strength. With unemployment near all time lows, consumers are spending more money with December’s outlook also looking strong. Additionally, the Commerce Department said that the third quarter estimate for gross domestic product has been revised with an increase to 2.1%. Last but not least, we also had approval of the FY20 budget, good news for our TSP TIPS subscribers!! But let’s put this news on pause and look back to Christmas week just one year ago. The S&P 500 was on a 5 week losing streak, it made new 52 week lows in 5 of the 7 trading days before Christmas, the Bollinger Band Index (BBI) had a volatile reading of 178, and market sentiment was negative. Fast forward one year and the S&P 500 has had positive returns in 10 of the last 11 weeks, with the current steak at 4. We’ve had new records on 6 of the last 7 trading days, and the BBI has a non-volatile reading of just 40. What a change in sentiment over the last year!! For TSP TIPS, all three equity funds (C/S/I) hit record highs on Monday, with the C and S funds marching further upward throughout the week and finishing Friday at new highs. All three funds are giving buys, but the performance ranking of the C and S funds have “slightly” distanced themselves from the I fund. As such we are recommending the following “slight” reallocation with the second December change on deck if needed next week. Lastly, to all our TSP TIPS subscribers near and far, we wish everyone a Happy Holiday season!!
The S&P 500 broke the 3200 threshold this week closing at 3221 Friday. The “Good News Trifecta” mentioned last week continues. On Friday, consumer spending was reported as growing at 3.2% for the third quarter which further confirms U.S. economic strength. With unemployment near all time lows, consumers are spending more money with December’s outlook also looking strong. Additionally, the Commerce Department said that the third quarter estimate for gross domestic product has been revised with an increase to 2.1%. Last but not least, we also had approval of the FY20 budget, good news for our TSP TIPS subscribers!! But let’s put this news on pause and look back to Christmas week just one year ago. The S&P 500 was on a 5 week losing streak, it made new 52 week lows in 5 of the 7 trading days before Christmas, the Bollinger Band Index (BBI) had a volatile reading of 178, and market sentiment was negative. Fast forward one year and the S&P 500 has had positive returns in 10 of the last 11 weeks, with the current steak at 4. We’ve had new records on 6 of the last 7 trading days, and the BBI has a non-volatile reading of just 40. What a change in sentiment over the last year!! For TSP TIPS, all three equity funds (C/S/I) hit record highs on Monday, with the C and S funds marching further upward throughout the week and finishing Friday at new highs. All three funds are giving buys, but the performance ranking of the C and S funds have “slightly” distanced themselves from the I fund. As such we are recommending the following “slight” reallocation with the second December change on deck if needed next week. Lastly, to all our TSP TIPS subscribers near and far, we wish everyone a Happy Holiday season!!