It was an up and down week for the markets as the S&P 500 notched a second consecutive week of losses, closing Friday at 3852. In anticipation of a good Consumer Price Index (CPI) report, the markets had over a one percent gain on Monday. Before Tuesdays open and matching that anticipation, the November CPI came out at 7.1% for the year, less than the expected 7.3% gain. As such, the S&P 500 had a bullish opening gap, up over 80 points. While it sold off during the day, it still had a nice move to the upside. And then came Wednesday afternoon with the Fed and Chair Powell announcing a half percentage point hike and targeting a rate range from 4.25% to 4.5%, the highest in 15 years. With that news the S&P 500 immediately dropped 50 points and from there on the bears took over. On Thursday November retail sales data showed declines higher than expected, and Friday was a pile on day with over one percent daily losses on both days. From a technical perspective, the S&P 500 broke below its 50 day Moving Average (MA) and its Performance Ranking turned negative. Looking back, this market kind of reminds me of December 2018. On 30 November 2018 the S&P 500 stood at 2760 and fell to a December closing low of 2351 on Christmas Eve, marking about a 15 percent loss. On 30 November 2022 the S&P 500 stood at 4080. A similar 15 percent loss would bring it to 3,475, just below our Year-To-Date (YTD) low of 3,491. And remember 2018 was a mid-term election year also. In fact, wouldnt it be unusual if 2022 had its yearly high the first trading day of the year (that block checked) and yearly low the last trading day. For TSP TIPS, the Performance Ranking (PR) leaderboard has the I fund at the top, the F fund closing in, and the C and S funds in negative territory. Peeling the PR onion back, of the four the F fund has the best one month return while the I fund has the best three month return. As such, we are recommending the following investment mix.
It was an up and down week for the markets as the S&P 500 notched a second consecutive week of losses, closing Friday at 3852. In anticipation of a good Consumer Price Index (CPI) report, the markets had over a one percent gain on Monday. Before Tuesdays open and matching that anticipation, the November CPI came out at 7.1% for the year, less than the expected 7.3% gain. As such, the S&P 500 had a bullish opening gap, up over 80 points. While it sold off during the day, it still had a nice move to the upside. And then came Wednesday afternoon with the Fed and Chair Powell announcing a half percentage point hike and targeting a rate range from 4.25% to 4.5%, the highest in 15 years. With that news the S&P 500 immediately dropped 50 points and from there on the bears took over. On Thursday November retail sales data showed declines higher than expected, and Friday was a pile on day with over one percent daily losses on both days. From a technical perspective, the S&P 500 broke below its 50 day Moving Average (MA) and its Performance Ranking turned negative. Looking back, this market kind of reminds me of December 2018. On 30 November 2018 the S&P 500 stood at 2760 and fell to a December closing low of 2351 on Christmas Eve, marking about a 15 percent loss. On 30 November 2022 the S&P 500 stood at 4080. A similar 15 percent loss would bring it to 3,475, just below our Year-To-Date (YTD) low of 3,491. And remember 2018 was a mid-term election year also. In fact, wouldnt it be unusual if 2022 had its yearly high the first trading day of the year (that block checked) and yearly low the last trading day. For TSP TIPS, the Performance Ranking (PR) leaderboard has the I fund at the top, the F fund closing in, and the C and S funds in negative territory. Peeling the PR onion back, of the four the F fund has the best one month return while the I fund has the best three month return. As such, we are recommending the following investment mix.