The S&P 500 started the week with a record close of 4255 on Monday, but then had a string of four down days with the market closing at 4166 on Friday. As mentioned last week, the Federal Reserve meeting was the big-ticket item as far as market movers go. After the meeting ended Wednesday, the Fed raised inflation expectations for 2021 to 3.4% which is a whole percentage point higher than the March projection. They also added two rate hikes to their 2023 forecast, which put pressure on the markets. From a technical perspective, Fridays sell off was exacerbated as the market fell during the last 30 minutes with the options expiration date. In some sectors, it also triggered what we call our take some money off the table circuit breakers, which pop when an index drops 2.5% or more from its most recent high. For TSP TIPS, even though the I fund hit new records on Monday and Tuesday, it did pop that above mentioned CB by Fridays close. Additionally, all three equity funds are hovering near their 50 day Moving Averages. As such, we are suggesting a move into a more defensive position by taking some money out of equities and into cash.
The S&P 500 started the week with a record close of 4255 on Monday, but then had a string of four down days with the market closing at 4166 on Friday. As mentioned last week, the Federal Reserve meeting was the big-ticket item as far as market movers go. After the meeting ended Wednesday, the Fed raised inflation expectations for 2021 to 3.4% which is a whole percentage point higher than the March projection. They also added two rate hikes to their 2023 forecast, which put pressure on the markets. From a technical perspective, Fridays sell off was exacerbated as the market fell during the last 30 minutes with the options expiration date. In some sectors, it also triggered what we call our take some money off the table circuit breakers, which pop when an index drops 2.5% or more from its most recent high. For TSP TIPS, even though the I fund hit new records on Monday and Tuesday, it did pop that above mentioned CB by Fridays close. Additionally, all three equity funds are hovering near their 50 day Moving Averages. As such, we are suggesting a move into a more defensive position by taking some money out of equities and into cash.