What a week as the three major market indices all closed at record highs on Friday with 1) the S&P 500 closing at 4411, 2) the Dow closing above the 35,000 level and 3) the NASDAQ Composite closing in on 15,000. COVID concerns and slowing global economic growth created an aggressive market dump on Monday. But fears quickly subsided as the market climbed Tuesday and by the end of day on Wednesday, Monday's losses had been wiped out. The 10-year Treasury yield sparked Monday's losses by dropping to a five-month low of 1.13%, but bounced back by the end of the week to 1.281% easing economic concerns. Looking at this week from a technical perspective, the S&P 500 built on the previous weeks bearishness on Monday when it gapped down at the open and was over 1.5% lower by the close. The interesting part was that it also crossed below its 50 day Moving Average (MA) intraday, but closed back above it by the close. That seemed to give the market support and give it the boost it needed for the rest of the week, with the Mega-Cap Tech sector leading the way to new record highs. And speaking of Mega-Cap Tech, next week we have those Top Five stocks (Apple, Microsoft, Amazon, Facebook and Google) all reporting earnings and hopefully, good numbers will lead to further bullishness. Thus far, a quarter of the S&P 500 companies have reported and 88% have beaten estimates. For TSP TIPS, the C fund, like the S&P 500, has been the place to be based on its #1 position in the Performance Rankings (PR). Performance Ranking measures individual fund performance over the last 1, 3, 6 and 12 month periods, with the 1 month period having a 40% weighting. That said, the C fund gained 4.12% during the last month while the S and I funds were down -0.42% and -0.03% respectively. As such, well maintain our current allocation for this week (also TSP only allows two reallocations/month) and hopefully those two sectors will have improving PRs as we enter August.
What a week as the three major market indices all closed at record highs on Friday with 1) the S&P 500 closing at 4411, 2) the Dow closing above the 35,000 level and 3) the NASDAQ Composite closing in on 15,000. COVID concerns and slowing global economic growth created an aggressive market dump on Monday. But fears quickly subsided as the market climbed Tuesday and by the end of day on Wednesday, Monday's losses had been wiped out. The 10-year Treasury yield sparked Monday's losses by dropping to a five-month low of 1.13%, but bounced back by the end of the week to 1.281% easing economic concerns. Looking at this week from a technical perspective, the S&P 500 built on the previous weeks bearishness on Monday when it gapped down at the open and was over 1.5% lower by the close. The interesting part was that it also crossed below its 50 day Moving Average (MA) intraday, but closed back above it by the close. That seemed to give the market support and give it the boost it needed for the rest of the week, with the Mega-Cap Tech sector leading the way to new record highs. And speaking of Mega-Cap Tech, next week we have those Top Five stocks (Apple, Microsoft, Amazon, Facebook and Google) all reporting earnings and hopefully, good numbers will lead to further bullishness. Thus far, a quarter of the S&P 500 companies have reported and 88% have beaten estimates. For TSP TIPS, the C fund, like the S&P 500, has been the place to be based on its #1 position in the Performance Rankings (PR). Performance Ranking measures individual fund performance over the last 1, 3, 6 and 12 month periods, with the 1 month period having a 40% weighting. That said, the C fund gained 4.12% during the last month while the S and I funds were down -0.42% and -0.03% respectively. As such, well maintain our current allocation for this week (also TSP only allows two reallocations/month) and hopefully those two sectors will have improving PRs as we enter August.