The S&P 500 finished August on a positive note, making it two straight up weeks, closing at 4515. The week started with an up day, but the big news came on Tuesday when consumer confidence and job openings fell more than expected. On the surface this might be bad news, but the markets interpreted it just the other way, saying that the reports are indicative that the Fed rate hikes are working to cool inflation, and further rates hikes might not be necessary. Regardless, the S&P 500 jumped over one percent on Tuesday, closing just shy of the 4500 level. Wednesdays second quarter GDP report showed the US economy growing at an annualized rate of 2.1%, and the S&P 500 closed above 4500. Thursday was positive as the Core Personal Consumption Expenditures Price Index (PCE) increased 0.2% in July, the same pace as June. Friday was a give back Thursdays gains day as the unemployment rate ticked up to 3.8%, but the S&P 500 did maintain that above 4500 close for the week. From a technical perspective, the S&P 500 gave two signals that we may be on a bullish trajectory again. The first was that the S&P 500s 20 day Exponential Moving Average (EMA) crossed above its 20 day Simple Moving Average (SMA). The second was a two bar reversal. Looking at the weekly S&P 500 candle chart, note the high point (or resistance) of the last two red/down bars, which was 4527 during the week of 7 August. On Thursday the S&P 500 broke above that level on an intraday basis, and did the same again on Friday. For next week the markets will be closed on Monday and economic news is very light. However, the following week we have inflation numbers and the Fed meeting on 19/20 September. For TSP TIPS, the C fund mirrored the S&P 500 and the S fund also had those two above-mentioned buy signals. To round it out, the I fund had only the 20 MA crossover. As such, we recommend the following new investment mix.
The S&P 500 finished August on a positive note, making it two straight up weeks, closing at 4515. The week started with an up day, but the big news came on Tuesday when consumer confidence and job openings fell more than expected. On the surface this might be bad news, but the markets interpreted it just the other way, saying that the reports are indicative that the Fed rate hikes are working to cool inflation, and further rates hikes might not be necessary. Regardless, the S&P 500 jumped over one percent on Tuesday, closing just shy of the 4500 level. Wednesdays second quarter GDP report showed the US economy growing at an annualized rate of 2.1%, and the S&P 500 closed above 4500. Thursday was positive as the Core Personal Consumption Expenditures Price Index (PCE) increased 0.2% in July, the same pace as June. Friday was a give back Thursdays gains day as the unemployment rate ticked up to 3.8%, but the S&P 500 did maintain that above 4500 close for the week. From a technical perspective, the S&P 500 gave two signals that we may be on a bullish trajectory again. The first was that the S&P 500s 20 day Exponential Moving Average (EMA) crossed above its 20 day Simple Moving Average (SMA). The second was a two bar reversal. Looking at the weekly S&P 500 candle chart, note the high point (or resistance) of the last two red/down bars, which was 4527 during the week of 7 August. On Thursday the S&P 500 broke above that level on an intraday basis, and did the same again on Friday. For next week the markets will be closed on Monday and economic news is very light. However, the following week we have inflation numbers and the Fed meeting on 19/20 September. For TSP TIPS, the C fund mirrored the S&P 500 and the S fund also had those two above-mentioned buy signals. To round it out, the I fund had only the 20 MA crossover. As such, we recommend the following new investment mix.