It was a nice run for the markets as the S&P 500 had its best week since 24 June 2022, closing at 3992. Going through the week, on Monday a crypto currency firm named FTX had a market cap of $32 billion. Tuesday we had the mid-term elections and the results are still pending, but what we do know is that since 1950, all 18 mid-term elections were followed by an up year for stocks. While the polls were still open on Tuesday, there was also some breaking news concerning crypto currency liquidity which resulted in an afternoon sell off. Wednesday the markets continued to sell off on the news with the S&P 500 down over 2%. But before the market opened on Thursday, Octobers consumer price index report showed a 0.4% increase for the month and 7.7% from a year ago. This was the lowest annual increase since January and a slowdown from Septembers 8.2% annual pace. And what a turn around. The S&P 500 gained 5.54% for the day, making it the best daily return since 6 April 2020 when it gained 7.03%. Friday the bull was back with the S&P 500 closing near session highs. And before I forget, on Friday that crypto currency firm named FTX had declared bankruptcy, froze withdrawals and was basically worthless. From a technical perspective, major market indices crossed key levels this week. The S&P 500 regained its position above its 50 day Moving Average (MA), its 20 day MA also crossed above that 50 day MA, and its Performance Ranking turned positive. With Thursdays 5.54% gain, the next question is it 1) just another bear market rally? or 2) start of a bull market? Looking back to 23 March 2020, the S&P 500 hit its pandemic low of 2237. On 24 March 2020, it had a daily gain of 9.38% and on 26 March 2020 it tacked on another 6.24%. That said, we do have a precedence set and who can say it wont happen again. While no one can predict the future, the technical indicators have us leaning towards #2. For TSP TIPS, all three equity funds (C/S/I) mimicked the above-mentioned S&P 500 movements. We also saw the F fund give a buy as that fund price increases as interest rates decrease. As such, we are recommending the following reallocation.
It was a nice run for the markets as the S&P 500 had its best week since 24 June 2022, closing at 3992. Going through the week, on Monday a crypto currency firm named FTX had a market cap of $32 billion. Tuesday we had the mid-term elections and the results are still pending, but what we do know is that since 1950, all 18 mid-term elections were followed by an up year for stocks. While the polls were still open on Tuesday, there was also some breaking news concerning crypto currency liquidity which resulted in an afternoon sell off. Wednesday the markets continued to sell off on the news with the S&P 500 down over 2%. But before the market opened on Thursday, Octobers consumer price index report showed a 0.4% increase for the month and 7.7% from a year ago. This was the lowest annual increase since January and a slowdown from Septembers 8.2% annual pace. And what a turn around. The S&P 500 gained 5.54% for the day, making it the best daily return since 6 April 2020 when it gained 7.03%. Friday the bull was back with the S&P 500 closing near session highs. And before I forget, on Friday that crypto currency firm named FTX had declared bankruptcy, froze withdrawals and was basically worthless. From a technical perspective, major market indices crossed key levels this week. The S&P 500 regained its position above its 50 day Moving Average (MA), its 20 day MA also crossed above that 50 day MA, and its Performance Ranking turned positive. With Thursdays 5.54% gain, the next question is it 1) just another bear market rally? or 2) start of a bull market? Looking back to 23 March 2020, the S&P 500 hit its pandemic low of 2237. On 24 March 2020, it had a daily gain of 9.38% and on 26 March 2020 it tacked on another 6.24%. That said, we do have a precedence set and who can say it wont happen again. While no one can predict the future, the technical indicators have us leaning towards #2. For TSP TIPS, all three equity funds (C/S/I) mimicked the above-mentioned S&P 500 movements. We also saw the F fund give a buy as that fund price increases as interest rates decrease. As such, we are recommending the following reallocation.