The markets had a nice week capping off two straight winning weeks for the S&P 500, closing at 3901. However, the bigger news was the Dow Jones Industrial Average (DJIA), which logged its fourth positive week in a row and best weekly performance since May. So why is this important? Last week I mentioned that the Mega-Cap Tech stocks (MSFT, GOOG; AMZN, META, APPL) would be reporting, and their market cap influences the direction of the S&P 500. Good earnings results in good stock performance, i.e., good S&P 500 returns. Except for Apple, those companies did not meet expectations. Meta Verse turned into Meta Worse, losing about 25% on Thursday and now trading below $100, its lowest price since 2016. However, those growth names are being pushed aside by the Industrials, which are more of a value play. To illustrate this push to the sideline, 20 of the 29 industrial/value stocks in the S&P 500 making 52-week highs on Friday also made all-time highs. And 3 of the 29 are also in the DJIA (Merck, McDonalds, Amgen). To plow on, Caterpillar finished the week up 15.3%, its best week since 2009. From a technical perspective, the S&P 500 closed above its 50 day Moving Average (MA) on Friday. If we can close above 3907 next week, the next key resistance level is the 12 September intraday high of 4119. Besides more earnings next week, we also have the Fed Rate decision and Octobers unemployment report. For TSP TIPS, both the C and S funds have crossed above their 50 day MAs this week and still have an upward trending Two Bar Bull Reversal. As such, we are recommending the following allocation. PLEASE REMEMBER TO ALLOCATE BEFORE NOON ON MONDAY IN ORDER TO TAKE ADVANTAGE OF OUR SECOND MONTHLY REALLOCATION.
The markets had a nice week capping off two straight winning weeks for the S&P 500, closing at 3901. However, the bigger news was the Dow Jones Industrial Average (DJIA), which logged its fourth positive week in a row and best weekly performance since May. So why is this important? Last week I mentioned that the Mega-Cap Tech stocks (MSFT, GOOG; AMZN, META, APPL) would be reporting, and their market cap influences the direction of the S&P 500. Good earnings results in good stock performance, i.e., good S&P 500 returns. Except for Apple, those companies did not meet expectations. Meta Verse turned into Meta Worse, losing about 25% on Thursday and now trading below $100, its lowest price since 2016. However, those growth names are being pushed aside by the Industrials, which are more of a value play. To illustrate this push to the sideline, 20 of the 29 industrial/value stocks in the S&P 500 making 52-week highs on Friday also made all-time highs. And 3 of the 29 are also in the DJIA (Merck, McDonalds, Amgen). To plow on, Caterpillar finished the week up 15.3%, its best week since 2009. From a technical perspective, the S&P 500 closed above its 50 day Moving Average (MA) on Friday. If we can close above 3907 next week, the next key resistance level is the 12 September intraday high of 4119. Besides more earnings next week, we also have the Fed Rate decision and Octobers unemployment report. For TSP TIPS, both the C and S funds have crossed above their 50 day MAs this week and still have an upward trending Two Bar Bull Reversal. As such, we are recommending the following allocation. PLEASE REMEMBER TO ALLOCATE BEFORE NOON ON MONDAY IN ORDER TO TAKE ADVANTAGE OF OUR SECOND MONTHLY REALLOCATION.