Although it was a holiday shortened week, the Russian invasion of Ukraine dominated the news which led to volatile market conditions. The week started on Tuesday with the S&P 500 down over 1%, Tesla down 7%, and Moderna down 10% for just that day. This bearishness continued into Algo Thursday, which refers to algorithmic computer trading. Regardless of economic and/or geopolitical conditions, institutional traders see an oversold condition, consider the markets on sale, and then jump in driving prices up in a very short period of time. For instance, in Thursdays session the S&P 500 was down as much as 2.6% by noon, but closed up 1.5% despite the outbreak of violence in Ukraine. The same held true for the Nasdaq Composite, which dropped nearly 3.5%, before rallying to close up 3.3%. Looking at volatility another way, we had 1% or greater moves all four trading days this week. That makes it 10 for the month and 18 for the year. That 9/month rate puts us on pace for 108 annually, which substantially outdistances the 64 we had in 2018, the last Mid-Term election year. On the negative side, one percent down moves have outpaced up moves by a 2:1 ratio. Next week well probably see geopolitical news continue to dominate the markets, and Fridays employment report will cap the week off with more volatility. For TSP TIPS, we did have a mid-week reallocation and at Fridays close, all TSP individual funds (C/S/I/F) still have a negative Performance Ranking. As such, we are recommending no allocation changes this week.
Although it was a holiday shortened week, the Russian invasion of Ukraine dominated the news which led to volatile market conditions. The week started on Tuesday with the S&P 500 down over 1%, Tesla down 7%, and Moderna down 10% for just that day. This bearishness continued into Algo Thursday, which refers to algorithmic computer trading. Regardless of economic and/or geopolitical conditions, institutional traders see an oversold condition, consider the markets on sale, and then jump in driving prices up in a very short period of time. For instance, in Thursdays session the S&P 500 was down as much as 2.6% by noon, but closed up 1.5% despite the outbreak of violence in Ukraine. The same held true for the Nasdaq Composite, which dropped nearly 3.5%, before rallying to close up 3.3%. Looking at volatility another way, we had 1% or greater moves all four trading days this week. That makes it 10 for the month and 18 for the year. That 9/month rate puts us on pace for 108 annually, which substantially outdistances the 64 we had in 2018, the last Mid-Term election year. On the negative side, one percent down moves have outpaced up moves by a 2:1 ratio. Next week well probably see geopolitical news continue to dominate the markets, and Fridays employment report will cap the week off with more volatility. For TSP TIPS, we did have a mid-week reallocation and at Fridays close, all TSP individual funds (C/S/I/F) still have a negative Performance Ranking. As such, we are recommending no allocation changes this week.