Week Ending 1 December 2023
The S&P 500 made it five straight up weeks closing Friday at 4594. The first half of this week was really a continuation of last weeks last half as that five-day period saw the S&P 500 having a tight closing range between 4550 and 4560. But that changed on Thursday, Novembers last trading day. Before the open the Personal Consumption Expenditures (PCE) price index came in at a 3.5% annual rate, slowing from last months 3.7%. As such, the markets liked the news on hopes that the Fed is done raising rates and could even begin lowering them in 2024. Thursday also marked the end of November, and what a good month it was. The Dow, S&P 500, and NASDAQ 100 all broke their three-month losing streaks with the S&P 500 and NASDAQ 100 having their best monthly performances since July 2022. Meanwhile the Dow was the first of the three to see a new Year To Date (YTD) high. The market rally continued into Friday buoyed by falling interest rates. Two weeks ago I mentioned that on 23 October, the 10-year Treasury yield was just under 5% and sitting at levels not seen since 2007 and the 10 year yield stood at 4.40%. Fast forward to this Friday and the 10 year yield has continued its fall to 4.21%. As mentioned previously, when yields drop investors look for better opportunities and will turn towards the markets. From a technical perspective the S&P 500 continued its march towards the next resistance level of 4607, the 2023 YTD high, which is now less than 1% away. Adding credence to a breakout was that above mentioned five day period when the S&P 500 was in that 4550-4560 range. As a result, its Bollinger Band Index, which measures volatility, decreased from last weeks overbought high of 129 to a consolidating 74. All told, major market indices seem to march in lockstep with each other and with the Dow hitting a new 2023 YTD high this week, hopefully the S&P 500 and NASDAQ will shortly follow. For next week the big event will be Fridays Jobs and Unemployment numbers, but if we do see a breakout above that 4607 resistance level, that could steal the spotlight. For TSP TIPS, it should be noted that the C fund hit its new YTD high on Thursday, with the I and S funds 1.8% and 2.6% away from new respective YTD highs. The C fund also has a Composite Score of 100 with the I and S funds close behind with 95 scores. Not to be left out, the F funds score is 85. Looking at the Performance Ranking leaderboard, the S funds one month return of over 13% has propelled it to the top spot this week. With this C, S and I bullishness we are recommending the following new investment mix.
Week Ending 1 December 2023
The S&P 500 made it five straight up weeks closing Friday at 4594. The first half of this week was really a continuation of last weeks last half as that five-day period saw the S&P 500 having a tight closing range between 4550 and 4560. But that changed on Thursday, Novembers last trading day. Before the open the Personal Consumption Expenditures (PCE) price index came in at a 3.5% annual rate, slowing from last months 3.7%. As such, the markets liked the news on hopes that the Fed is done raising rates and could even begin lowering them in 2024. Thursday also marked the end of November, and what a good month it was. The Dow, S&P 500, and NASDAQ 100 all broke their three-month losing streaks with the S&P 500 and NASDAQ 100 having their best monthly performances since July 2022. Meanwhile the Dow was the first of the three to see a new Year To Date (YTD) high. The market rally continued into Friday buoyed by falling interest rates. Two weeks ago I mentioned that on 23 October, the 10-year Treasury yield was just under 5% and sitting at levels not seen since 2007 and the 10 year yield stood at 4.40%. Fast forward to this Friday and the 10 year yield has continued its fall to 4.21%. As mentioned previously, when yields drop investors look for better opportunities and will turn towards the markets. From a technical perspective the S&P 500 continued its march towards the next resistance level of 4607, the 2023 YTD high, which is now less than 1% away. Adding credence to a breakout was that above mentioned five day period when the S&P 500 was in that 4550-4560 range. As a result, its Bollinger Band Index, which measures volatility, decreased from last weeks overbought high of 129 to a consolidating 74. All told, major market indices seem to march in lockstep with each other and with the Dow hitting a new 2023 YTD high this week, hopefully the S&P 500 and NASDAQ will shortly follow. For next week the big event will be Fridays Jobs and Unemployment numbers, but if we do see a breakout above that 4607 resistance level, that could steal the spotlight. For TSP TIPS, it should be noted that the C fund hit its new YTD high on Thursday, with the I and S funds 1.8% and 2.6% away from new respective YTD highs. The C fund also has a Composite Score of 100 with the I and S funds close behind with 95 scores. Not to be left out, the F funds score is 85. Looking at the Performance Ranking leaderboard, the S funds one month return of over 13% has propelled it to the top spot this week. With this C, S and I bullishness we are recommending the following new investment mix.