While the S&P 500 was down for the second week in a row, losses were just 0.16% as it closed at 4550, seven points lower than last Friday. With no big economic at the start of the week, markets were muted. Wednesday came and core Consumer Price Index (CPI) showed monthly and annual gains of 0.3% and 4.3%, pretty much in line with estimates of 0.2% and 4.3%, and the markets reaction was muted. On Thursday we had the second inflation component as the Producer Price Index (PPI) grew 0.7% in August, above economists expectations, while core PPI climbed by 0.2%, in line with estimates. With CPI and PPI combined, the overall reaction was positive as Thursday was the best day of the week. However, on Friday the consumer sentiment number came in at 67.7, down from the August read of 69.5 and the markets gave back Thursdays gains. From a technical perspective, in last weeks update we mentioned that we had three consecutive weeks of higher weekly lows for the S&P 500. Well, that streak continued as this weeks low was 4447, higher than last weeks low of 4430. When you combine that streak continuing with the two-week loss streak mentioned in the opening sentence, it does appear as if the S&P 500 is consolidating further. Hopefully, maybe next week when the Fed meets well get some bullish news and the markets will break out to the upside. For TSP TIPS, the three equity funds (C/S/I) are seeing a tightening of the distance between their Price and 20/50 day Moving Averages, reflecting that consolidation. As such we recommend no changes as we head into Fed week.
While the S&P 500 was down for the second week in a row, losses were just 0.16% as it closed at 4550, seven points lower than last Friday. With no big economic at the start of the week, markets were muted. Wednesday came and core Consumer Price Index (CPI) showed monthly and annual gains of 0.3% and 4.3%, pretty much in line with estimates of 0.2% and 4.3%, and the markets reaction was muted. On Thursday we had the second inflation component as the Producer Price Index (PPI) grew 0.7% in August, above economists expectations, while core PPI climbed by 0.2%, in line with estimates. With CPI and PPI combined, the overall reaction was positive as Thursday was the best day of the week. However, on Friday the consumer sentiment number came in at 67.7, down from the August read of 69.5 and the markets gave back Thursdays gains. From a technical perspective, in last weeks update we mentioned that we had three consecutive weeks of higher weekly lows for the S&P 500. Well, that streak continued as this weeks low was 4447, higher than last weeks low of 4430. When you combine that streak continuing with the two-week loss streak mentioned in the opening sentence, it does appear as if the S&P 500 is consolidating further. Hopefully, maybe next week when the Fed meets well get some bullish news and the markets will break out to the upside. For TSP TIPS, the three equity funds (C/S/I) are seeing a tightening of the distance between their Price and 20/50 day Moving Averages, reflecting that consolidation. As such we recommend no changes as we head into Fed week.