After hitting records on Monday and Wednesday, the S&P 500 couldn\'t hold on closing at 3913 Friday. The week started with records from the S&P 500, Dow, and Russell 2000 but pulled back as the central bank started its two-day meeting. On Wednesday, the Federal Reserve announced that they expect to be extraordinarily accommodative for a very long time to come, even as the economic outlook brightens, and they have no intention to raise interest rates through 2023. This shot the Dow above the 33,000 threshold for the first time and pushed the S&P 500 to its second record of the week. On Thursday, the markets reversed course as bond yields jumped, which then pose a challenge to growth stocks and have become the primary risk facing the stock market. Finally, on Friday the central bank decided not to extend the pandemic supplementary leverage ratio rule for banks that will expire at the end of this month. This pushed 10-year Treasury yield upward, which created a selloff in bank stocks. Now let’s shift gears to next week. On 23 March 2020, one year ago, we will mark the market’s pandemic low when the S&P 500 closed at 2237. Since that time we have climbed a “Wall of Worry” to the new record highs noted above. Emotions have run high during the past year, which may have impacted some investors decisions regarding the markets. However, from a technical perspective we have found that price is the “Resolution of all forces”. From the “The Art of Low Risk Investing” by Michael G. Zahorchak, “A successful system for buying and selling stocks can be based on price and nothing else because in the end price is the ultimate resolution of all the forces that have an effect on any particular stock at any particular time. Everything anybody knows, thinks, believes, or feels about a stock is translated into the price at which a stock trades.” And finally we get to TSP TIPS. All three of the TSP equity funds (S/C/I) are in "hold" territory and all have an "A" performance ranking (PR). Since S and C are at the top of the PR leaderboard, we’ll continue with our current allocation and wait to see what next week brings.
After hitting records on Monday and Wednesday, the S&P 500 couldn\'t hold on closing at 3913 Friday. The week started with records from the S&P 500, Dow, and Russell 2000 but pulled back as the central bank started its two-day meeting. On Wednesday, the Federal Reserve announced that they expect to be extraordinarily accommodative for a very long time to come, even as the economic outlook brightens, and they have no intention to raise interest rates through 2023. This shot the Dow above the 33,000 threshold for the first time and pushed the S&P 500 to its second record of the week. On Thursday, the markets reversed course as bond yields jumped, which then pose a challenge to growth stocks and have become the primary risk facing the stock market. Finally, on Friday the central bank decided not to extend the pandemic supplementary leverage ratio rule for banks that will expire at the end of this month. This pushed 10-year Treasury yield upward, which created a selloff in bank stocks. Now let’s shift gears to next week. On 23 March 2020, one year ago, we will mark the market’s pandemic low when the S&P 500 closed at 2237. Since that time we have climbed a “Wall of Worry” to the new record highs noted above. Emotions have run high during the past year, which may have impacted some investors decisions regarding the markets. However, from a technical perspective we have found that price is the “Resolution of all forces”. From the “The Art of Low Risk Investing” by Michael G. Zahorchak, “A successful system for buying and selling stocks can be based on price and nothing else because in the end price is the ultimate resolution of all the forces that have an effect on any particular stock at any particular time. Everything anybody knows, thinks, believes, or feels about a stock is translated into the price at which a stock trades.” And finally we get to TSP TIPS. All three of the TSP equity funds (S/C/I) are in "hold" territory and all have an "A" performance ranking (PR). Since S and C are at the top of the PR leaderboard, we’ll continue with our current allocation and wait to see what next week brings.