Even with a President’s Day short week, the S&P 500 notched a record close of 3386 on Wednesday. Contributing to this mid-week highlight was a continuation of the Large Cap tech rally and the distribution of the Fed’s January meeting minutes, which stated that interest rates will remain unchanged but they will be monitoring coronavirus effects. Piling on to that, Friday opened to overnight news that 800 new cases had been reported in China along with 200 new cases in South Korea. This resulted in a market sell off with that Large Cap Tech sector reversing course and the S&P 500 closing the week at 3337, down but still within two percent of Wednesday’s record high. February has also seen the S&P 500 Bollinger Band index widen from 39 to 61, but still below that 70 “overbought” level. On the opposite side, bond markets had a nice week with the 30 Year treasury bond’s yield dropping below 1.9% for the first time ever which resulted in new bond fund record highs. For TSP TIPS, it was a “Whack a Mole” type of week with the C, S and F funds. On Tuesday, the F fund popped to a new record high. On Wednesday, the C and S funds popped to new record highs. On Thursday, the S and F funds popped to new record highs. And on Friday, the F fund again popped to a new record high. As mentioned last week, the I fund is still shy of its last record close on 17 January. As such, we are recommending staying with our current allocation and will see how next week plays out as we head into March.
Even with a President’s Day short week, the S&P 500 notched a record close of 3386 on Wednesday. Contributing to this mid-week highlight was a continuation of the Large Cap tech rally and the distribution of the Fed’s January meeting minutes, which stated that interest rates will remain unchanged but they will be monitoring coronavirus effects. Piling on to that, Friday opened to overnight news that 800 new cases had been reported in China along with 200 new cases in South Korea. This resulted in a market sell off with that Large Cap Tech sector reversing course and the S&P 500 closing the week at 3337, down but still within two percent of Wednesday’s record high. February has also seen the S&P 500 Bollinger Band index widen from 39 to 61, but still below that 70 “overbought” level. On the opposite side, bond markets had a nice week with the 30 Year treasury bond’s yield dropping below 1.9% for the first time ever which resulted in new bond fund record highs. For TSP TIPS, it was a “Whack a Mole” type of week with the C, S and F funds. On Tuesday, the F fund popped to a new record high. On Wednesday, the C and S funds popped to new record highs. On Thursday, the S and F funds popped to new record highs. And on Friday, the F fund again popped to a new record high. As mentioned last week, the I fund is still shy of its last record close on 17 January. As such, we are recommending staying with our current allocation and will see how next week plays out as we head into March.