What a difference a week makes. Last week we stated that “….S&P 500 recording its first negative month since October”. This week, the markets had their best week since November with major market indices hitting new all-time highs. Friday morning was busy as an underwhelming jobs number was overshadowed by the new stimulus bill moving forward in the Senate after a budget resolution was passed. The hope of fiscal stimulus, an accelerating vaccination pace, and an environment of low interest rates is driving this market higher. More specifically, of the 184 companies in the S&P 500 that have reported earnings, 84.2% have topped analyst expectations. From a technical perspective, this week’s broad bullish action also saw the Russell 2000 Small Cap and S&P 500 Large Cap indices reverse their trends with 1) finishes above their 50 day Moving Averages (MA) and 2) recording new historical highs. With the S&P 500 closing at 3886 on Friday, we’re now within three percent of that “4K” level. For TSP TIPS, we move incrementally in and out of the market, last week “taking a little bit of money off the table”. Given the above this week, we’ll now put that "little bit of money" back into the markets with Moving Averages providing the basis of “when” to be in the market. The Performance Ranking of each individual fund then tells us “where” to be in the market. Similar to their underlying indices, both the S and C funds made new record highs this week and are ranked 1 and 2 respectively. At number 3, the I fund’s last record high was on 8 January. As such, we are recommending the following reallocation.
What a difference a week makes. Last week we stated that “….S&P 500 recording its first negative month since October”. This week, the markets had their best week since November with major market indices hitting new all-time highs. Friday morning was busy as an underwhelming jobs number was overshadowed by the new stimulus bill moving forward in the Senate after a budget resolution was passed. The hope of fiscal stimulus, an accelerating vaccination pace, and an environment of low interest rates is driving this market higher. More specifically, of the 184 companies in the S&P 500 that have reported earnings, 84.2% have topped analyst expectations. From a technical perspective, this week’s broad bullish action also saw the Russell 2000 Small Cap and S&P 500 Large Cap indices reverse their trends with 1) finishes above their 50 day Moving Averages (MA) and 2) recording new historical highs. With the S&P 500 closing at 3886 on Friday, we’re now within three percent of that “4K” level. For TSP TIPS, we move incrementally in and out of the market, last week “taking a little bit of money off the table”. Given the above this week, we’ll now put that "little bit of money" back into the markets with Moving Averages providing the basis of “when” to be in the market. The Performance Ranking of each individual fund then tells us “where” to be in the market. Similar to their underlying indices, both the S and C funds made new record highs this week and are ranked 1 and 2 respectively. At number 3, the I fund’s last record high was on 8 January. As such, we are recommending the following reallocation.