The S&P 500 continued to build on April’s gains and closed Friday at 2929, thereby retracing more and more of March’s coronavirus losses. This week the Labor Department reported that over 20 million jobs were lost last month, which brought the unemployment rate up to 14.7%. This is a big jump from the recent record low unemployment rate of 4%, and the worst in ninety years, going back to the Great Depression. So the big question is, why is the market rebounding if consumer spending is low and unemployment is high? This pandemic is a once-in-a-lifetime event that put the world in an uncertain spiral and a steep market sell-off in March. Now, the market has a more optimistic view with states opening in phases, as well as the cushion of the CARES Act. Most jobs lost were concentrated in the service sectors and hopefully those people will be returning to the workforce as more businesses reopen. From a technical perspective, we are seeing renewed bullishness and letting the “Trend be our friend”. We’re also seeing continued improvement in the S&P 500’s performance ranking (PR), and it’s Bollinger Band Index (BBI) is returning to its historical norm. For TSP TIPS, I said last week that “we would look for an allocation increase next week” if this bullish trend continued. Well, it is now time for that allocation increase. That said, we’ve seen the S fund’s performance improve over the last month and are recommending moving some funds into that sector. Lastly, we would like to wish all Mom’s a Happy Mothers Day!!
The S&P 500 continued to build on April’s gains and closed Friday at 2929, thereby retracing more and more of March’s coronavirus losses. This week the Labor Department reported that over 20 million jobs were lost last month, which brought the unemployment rate up to 14.7%. This is a big jump from the recent record low unemployment rate of 4%, and the worst in ninety years, going back to the Great Depression. So the big question is, why is the market rebounding if consumer spending is low and unemployment is high? This pandemic is a once-in-a-lifetime event that put the world in an uncertain spiral and a steep market sell-off in March. Now, the market has a more optimistic view with states opening in phases, as well as the cushion of the CARES Act. Most jobs lost were concentrated in the service sectors and hopefully those people will be returning to the workforce as more businesses reopen. From a technical perspective, we are seeing renewed bullishness and letting the “Trend be our friend”. We’re also seeing continued improvement in the S&P 500’s performance ranking (PR), and it’s Bollinger Band Index (BBI) is returning to its historical norm. For TSP TIPS, I said last week that “we would look for an allocation increase next week” if this bullish trend continued. Well, it is now time for that allocation increase. That said, we’ve seen the S fund’s performance improve over the last month and are recommending moving some funds into that sector. Lastly, we would like to wish all Mom’s a Happy Mothers Day!!