With the S&P 500 posting its worst week since 2020 and down in 10 of the last 11 weeks, it closed at 3674 on Friday. Contributing to this weeks sell off was May retail sales and housing starts falling short of expectations. However, the big news was the Federal Reserve raising its benchmark interest rate by 0.75%, the most since 1994, to slow inflation. From a technical perspective, the S&P 500 fell below a key support level of 3810 on Monday while losing over 3%. After Wednesdays Fed announcement, the S&P 500 fell another 3+% on Thursday officially closing into bear market territory, down over 20% from its 3 January record high. To illustrate just how broad this sell off has been, all 11 S&P 500 sectors finished the week more than 15% below their recent highs. Next week is Juneteenth holiday shortened, but we do have Fed Chair Powell testimony and housing data being reported. For TSP TIPS, on Monday we sent out a reallocation alert to increase cash in this bearish environment. As such, that recommendation stands for this weekend. Lastly, happy Fathers Day to all the dads out there.
With the S&P 500 posting its worst week since 2020 and down in 10 of the last 11 weeks, it closed at 3674 on Friday. Contributing to this weeks sell off was May retail sales and housing starts falling short of expectations. However, the big news was the Federal Reserve raising its benchmark interest rate by 0.75%, the most since 1994, to slow inflation. From a technical perspective, the S&P 500 fell below a key support level of 3810 on Monday while losing over 3%. After Wednesdays Fed announcement, the S&P 500 fell another 3+% on Thursday officially closing into bear market territory, down over 20% from its 3 January record high. To illustrate just how broad this sell off has been, all 11 S&P 500 sectors finished the week more than 15% below their recent highs. Next week is Juneteenth holiday shortened, but we do have Fed Chair Powell testimony and housing data being reported. For TSP TIPS, on Monday we sent out a reallocation alert to increase cash in this bearish environment. As such, that recommendation stands for this weekend. Lastly, happy Fathers Day to all the dads out there.