Fed's clarity on tapering $120B monthly bond purchases reduced market uncertainty
C Fund leads TSP performance with 4 new highs this week; S Fund broke June resistance
Light economic calendar ahead but Friday jobs report could impact Labor Day trading
The S&P 500 crossed the 4500 threshold this week and closed Friday at a record high 4509. The big market mover was Federal Reserve Chairman Jerome Powell saying that the central bank will be tapering its monthly $120 billion bond purchases this year. He also stated that inflation is around its two percent target and, while progress towards maximum employment has been made, substantial further progress is still needed. These remarks took some of the uncertainty out of the markets and the bulls rallied into Fridays close. From a technical perspective, the S&P 500 continues to plod ahead and has stair stepped itself to eleven new record highs in August. Market breadth has also improved with the small and mid-cap sectors breaking out to the upside of their consolidation channels. Next weeks economic news is light but we do have Fridays payroll report heading into the long Labor Day weekend. Based on TSP TIPS Performance Ranking (PR), the C fund takes top position having made new highs on four days this week including Friday. The S fund also made a new high on Friday, its first since 25 June, and stands in the runner up position. The I fund has an improving PR but is still just shy of making a new high. As such, we are recommending staying with our current allocation and hopefully this August bullishness will continue into September.
The S&P 500 crossed the 4500 threshold this week and closed Friday at a record high 4509. The big market mover was Federal Reserve Chairman Jerome Powell saying that the central bank will be tapering its monthly $120 billion bond purchases this year. He also stated that inflation is around its two percent target and, while progress towards maximum employment has been made, substantial further progress is still needed. These remarks took some of the uncertainty out of the markets and the bulls rallied into Fridays close. From a technical perspective, the S&P 500 continues to plod ahead and has stair stepped itself to eleven new record highs in August. Market breadth has also improved with the small and mid-cap sectors breaking out to the upside of their consolidation channels. Next weeks economic news is light but we do have Fridays payroll report heading into the long Labor Day weekend. Based on TSP TIPS Performance Ranking (PR), the C fund takes top position having made new highs on four days this week including Friday. The S fund also made a new high on Friday, its first since 25 June, and stands in the runner up position. The I fund has an improving PR but is still just shy of making a new high. As such, we are recommending staying with our current allocation and hopefully this August bullishness will continue into September.