It was a volatile bookend kind of week as the S&P 500 had more than two percent losses on Monday and Friday, closing at 4057. The key driver for the week was Fridays Fed Chairman Powells eight-minute speech at Jackson Hole. To fight inflation, he mentioned that the central bank will continue raising interest rates that will cause some pain to the U.S. economy. Its not very often you hear words like that from a Fed Chairman, and the result was a steady sell off with the S&P 500 closing at session lows. From a technical perspective, the S&P 500 crossed below the key support level of 4079 that was mentioned in our last update. As such, it looks as if this recent two-month rally has run out of steam and could possibly test the 17 June intraday low of 3636, or about 10% below current levels. Next week the key market event will be the August unemployment report on Friday. For TSP TIPS, the C fund mirrored the movement of the S&P 500 and Fridays sell off also resulted in the Performance Rating turning negative for both the C and S funds. Given this scenario, we are recommending the following reallocation.
It was a volatile bookend kind of week as the S&P 500 had more than two percent losses on Monday and Friday, closing at 4057. The key driver for the week was Fridays Fed Chairman Powells eight-minute speech at Jackson Hole. To fight inflation, he mentioned that the central bank will continue raising interest rates that will cause some pain to the U.S. economy. Its not very often you hear words like that from a Fed Chairman, and the result was a steady sell off with the S&P 500 closing at session lows. From a technical perspective, the S&P 500 crossed below the key support level of 4079 that was mentioned in our last update. As such, it looks as if this recent two-month rally has run out of steam and could possibly test the 17 June intraday low of 3636, or about 10% below current levels. Next week the key market event will be the August unemployment report on Friday. For TSP TIPS, the C fund mirrored the movement of the S&P 500 and Fridays sell off also resulted in the Performance Rating turning negative for both the C and S funds. Given this scenario, we are recommending the following reallocation.