Strong jobs report (638K added, unemployment <7%) drove market gains during election week
All equity TSP funds (S/C/I) returned to buy zone with S fund hitting new record highs
Historical precedent shows 4.6% S&P 500 gains from 2016 election day through year-end
Election week was surprisingly good for the markets as we saw gains across all major market indices. Contributing to this move was unemployment falling below 7 percent and 638,000 jobs added to the economy. With the outcome of the election still undecided when the market closed on Friday, the S&P 500 had a flat Friday but did finish out the week higher at 3508. So how does this pan out as we approach year end? Looking back to the 2016 election, the S&P 500 gained 4.6 percent between election day and 31 December. It sure would be nice if we had that same bullish scenario repeat itself. For TSP TIPS, it was good news for the equity funds (S/C/I) as they have all returned to the “buy zone” this week. Based on performance ranking order, the #1 S fund broke out and hit a new record high on Thursday. The #2 C fund is just two percent shy of its record high set on 2 September. And the #3 I fund is right at the heels of the C fund, closing at its highest levels since the March lows. As such, the following reallocation is recommended.
Recommended Allocation (Moderate Profile)
This is our historical recommendation from this date.
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Election week was surprisingly good for the markets as we saw gains across all major market indices. Contributing to this move was unemployment falling below 7 percent and 638,000 jobs added to the economy. With the outcome of the election still undecided when the market closed on Friday, the S&P 500 had a flat Friday but did finish out the week higher at 3508. So how does this pan out as we approach year end? Looking back to the 2016 election, the S&P 500 gained 4.6 percent between election day and 31 December. It sure would be nice if we had that same bullish scenario repeat itself. For TSP TIPS, it was good news for the equity funds (S/C/I) as they have all returned to the “buy zone” this week. Based on performance ranking order, the #1 S fund broke out and hit a new record high on Thursday. The #2 C fund is just two percent shy of its record high set on 2 September. And the #3 I fund is right at the heels of the C fund, closing at its highest levels since the March lows. As such, the following reallocation is recommended.