Friday marked the end of the first half of 2023 and the S&P 500 had its best first half since 2019, closing at a Year To Date (YTD) high of 4450. After last weeks slight stumble, the SP 500 is now up in six of the last seven weeks. Monday saw the markets fall but the bull came back on Tuesday with the S&P 500 up over one percent. Before Thursdays opening bell, the Initial Jobless Claims number fell by 26,000, the sharpest drop since October 2021, and a nice GDP report led to another bullish day. More good news came in before Fridays opening bell with the May personal consumption expenditure price index increasing by 3.8% on an annual basis, the lowest reading since April 2021. Needless to say, the S&P 500 gapped open to the upside and from there it notched its second daily gain of over one percent for the week. Since we are now at halfway point for 2023, what should we expect in the second half? Three weeks ago we mentioned that to make up for the ground lost in 2022, the S&P 500 would have to gain back 957 points in 2023, which would take us back to 4796, the previous record closing high. Given that, the mid-year target was 4317. Were now 133 points above that, and just under 8% away from that round trip. While no one can predict the future, we can envision more people looking at their 30 June quarterly statement and getting that Fear Of Missing Out (FOMO) feeling while waiting for the recession. With earnings season starting in a couple of weeks, we could see an influx of money coming back into the market, driving demand and pushing us towards that new record high. Closer in, next week is another holiday shortened week with the big economic news being Fridays unemployment rate number. For TSP TIPS, you should have received notice that we are now offering Conservative, Moderate and Aggressive TSP TIPS models. So how does it work? First of all, if you dont take the quiz youll continue to get what you have in the past, a Moderate+ model. If you do take the Risk Quiz, it assigns a score based upon your answers, which then determines which model you will receive. For Conservative, the max allocation for any equity fund will be approximately 33%. For Moderate, the max allocation will be 50%, and for Aggressive up to 100%. So lets look at transition. As you know, our current investment mix is 60/40 for the C/S. Given that, only one of our indicators is not giving a buy signal, and that one will most likely turn bullish this week. Therefore, we did not issue a 30 June new investment mix. When/if it does, all three models will then be 100% invested in the equity funds. As this is the beginning of July, if you make the reallocation this weekend, then youll use one of the two monthly reallocations. Just for your awareness, the most likely new investment mix will be mid-month (15 July) and be Conservative: 34C/33S/33S; Moderate: 50C/50S; and Aggressive: 53C/47S.
Friday marked the end of the first half of 2023 and the S&P 500 had its best first half since 2019, closing at a Year To Date (YTD) high of 4450. After last weeks slight stumble, the SP 500 is now up in six of the last seven weeks. Monday saw the markets fall but the bull came back on Tuesday with the S&P 500 up over one percent. Before Thursdays opening bell, the Initial Jobless Claims number fell by 26,000, the sharpest drop since October 2021, and a nice GDP report led to another bullish day. More good news came in before Fridays opening bell with the May personal consumption expenditure price index increasing by 3.8% on an annual basis, the lowest reading since April 2021. Needless to say, the S&P 500 gapped open to the upside and from there it notched its second daily gain of over one percent for the week. Since we are now at halfway point for 2023, what should we expect in the second half? Three weeks ago we mentioned that to make up for the ground lost in 2022, the S&P 500 would have to gain back 957 points in 2023, which would take us back to 4796, the previous record closing high. Given that, the mid-year target was 4317. Were now 133 points above that, and just under 8% away from that round trip. While no one can predict the future, we can envision more people looking at their 30 June quarterly statement and getting that Fear Of Missing Out (FOMO) feeling while waiting for the recession. With earnings season starting in a couple of weeks, we could see an influx of money coming back into the market, driving demand and pushing us towards that new record high. Closer in, next week is another holiday shortened week with the big economic news being Fridays unemployment rate number. For TSP TIPS, you should have received notice that we are now offering Conservative, Moderate and Aggressive TSP TIPS models. So how does it work? First of all, if you dont take the quiz youll continue to get what you have in the past, a Moderate+ model. If you do take the Risk Quiz, it assigns a score based upon your answers, which then determines which model you will receive. For Conservative, the max allocation for any equity fund will be approximately 33%. For Moderate, the max allocation will be 50%, and for Aggressive up to 100%. So lets look at transition. As you know, our current investment mix is 60/40 for the C/S. Given that, only one of our indicators is not giving a buy signal, and that one will most likely turn bullish this week. Therefore, we did not issue a 30 June new investment mix. When/if it does, all three models will then be 100% invested in the equity funds. As this is the beginning of July, if you make the reallocation this weekend, then youll use one of the two monthly reallocations. Just for your awareness, the most likely new investment mix will be mid-month (15 July) and be Conservative: 34C/33S/33S; Moderate: 50C/50S; and Aggressive: 53C/47S.