The S&P 500 had a down week, making it two in a row and closing at 4081. It seemed as if it was a tug of war between strong economic reports and the fear that the Fed will keep rates on the high side in their fight against inflation. On Tuesday the Consumer Price Index (CPI) for January showed a 0.5% increase over the previous month while the annual number came in at 6.4%, continuing its downward trend from 9.1% last June. On Wednesday U.S. retail sales jumped 3% in January, marking the biggest increase since March 2021. On Thursday Januarys Producer Price Index (PPI) came in above expectations with a rise of 0.7% while initial weekly jobless claims unexpectedly fell. As a result of the above, the rate on the 10 year Treasury hit a 2023 high of 3.90% on Friday, up significantly from its 2023 low of 3.33% only two weeks ago. From a technical perspective, the S&P 500 closed above the 4,000 level on 23 January. In the four weeks since then, we appear to be in a consolidation range between that 4K level and the 2023 high of 4195. Hopefully this range will hold and well next see a breakout to the upside in the not too distant future, although we have some time before the next Fed meeting on 21/22 March. Next week the markets are closed Monday for the Presidents Day holiday. For TSP TIPS were seeing a rotation among the funds during this consolidation phase. The I fund crossed below its 20 day Moving Average (MA) on 6 Feb and has bounced above and below that level twice since then. Like the S&P 500s action over the last four weeks, the C fund fell below its 20 day MA on Friday. Meanwhile, the S fund had a positive week with an increasing Performance Ranking (PR). On the other side of the coin, the F fund fell into negative PR territory as a result of those rising interest rates. As such, we recommend the following new investment mix.
The S&P 500 had a down week, making it two in a row and closing at 4081. It seemed as if it was a tug of war between strong economic reports and the fear that the Fed will keep rates on the high side in their fight against inflation. On Tuesday the Consumer Price Index (CPI) for January showed a 0.5% increase over the previous month while the annual number came in at 6.4%, continuing its downward trend from 9.1% last June. On Wednesday U.S. retail sales jumped 3% in January, marking the biggest increase since March 2021. On Thursday Januarys Producer Price Index (PPI) came in above expectations with a rise of 0.7% while initial weekly jobless claims unexpectedly fell. As a result of the above, the rate on the 10 year Treasury hit a 2023 high of 3.90% on Friday, up significantly from its 2023 low of 3.33% only two weeks ago. From a technical perspective, the S&P 500 closed above the 4,000 level on 23 January. In the four weeks since then, we appear to be in a consolidation range between that 4K level and the 2023 high of 4195. Hopefully this range will hold and well next see a breakout to the upside in the not too distant future, although we have some time before the next Fed meeting on 21/22 March. Next week the markets are closed Monday for the Presidents Day holiday. For TSP TIPS were seeing a rotation among the funds during this consolidation phase. The I fund crossed below its 20 day Moving Average (MA) on 6 Feb and has bounced above and below that level twice since then. Like the S&P 500s action over the last four weeks, the C fund fell below its 20 day MA on Friday. Meanwhile, the S fund had a positive week with an increasing Performance Ranking (PR). On the other side of the coin, the F fund fell into negative PR territory as a result of those rising interest rates. As such, we recommend the following new investment mix.