July notched the sixth positive month in a row for the S&P 500 closing at 4395. On the week, Monday started with new record highs across the major averages followed by a stream of earnings and economic data. On Wednesday the Federal Open Market Committee reported that it intends to keep interest rates near zero and that substantial economic improvement "with strong job numbers" were needed before making any upward adjustments. On Thursday, second quarter GDP numbers came in at 6.5%, which was better than first quarter, but less than the estimates of 8.4%. And finally on Friday, the core personal consumption expenditures price index rose 3.5%, marking sharp acceleration in inflation, but slightly below the expected 3.6%. Now on to Mega Cap Tech earnings which started to come in after Mondays record close. Last week I mentioned that ..Apple, Microsoft, Amazon, Facebook and Google were all reporting earnings and hopefully, good numbers would lead to further bullishness. Well not so fast. Based on the reports, four of those Top Five stocks were down for the week, with Amazon the worst performer losing 7.5% on Friday alone. Since they make up about 20% of the S&P 500 weight, this could put some consolidation pressure on the markets in the near future. For TSP TIPS, the C fund remains at the top of the Performance Ranking ladder with both the S and I funds stuck in sideways channels. As such, we recommend no changes to our current allocation.
July notched the sixth positive month in a row for the S&P 500 closing at 4395. On the week, Monday started with new record highs across the major averages followed by a stream of earnings and economic data. On Wednesday the Federal Open Market Committee reported that it intends to keep interest rates near zero and that substantial economic improvement "with strong job numbers" were needed before making any upward adjustments. On Thursday, second quarter GDP numbers came in at 6.5%, which was better than first quarter, but less than the estimates of 8.4%. And finally on Friday, the core personal consumption expenditures price index rose 3.5%, marking sharp acceleration in inflation, but slightly below the expected 3.6%. Now on to Mega Cap Tech earnings which started to come in after Mondays record close. Last week I mentioned that ..Apple, Microsoft, Amazon, Facebook and Google were all reporting earnings and hopefully, good numbers would lead to further bullishness. Well not so fast. Based on the reports, four of those Top Five stocks were down for the week, with Amazon the worst performer losing 7.5% on Friday alone. Since they make up about 20% of the S&P 500 weight, this could put some consolidation pressure on the markets in the near future. For TSP TIPS, the C fund remains at the top of the Performance Ranking ladder with both the S and I funds stuck in sideways channels. As such, we recommend no changes to our current allocation.