The S&P 500 continued upward extending its weekly up streak to nine in a row, its best win streak since 2004, and closing Friday at 4769.83. The holiday shortened week brought in low volume and no major economic news, but the S&P 500 kept chugging upward and got within 3 points of its All time closing high on Thursday morning. It still eked out a slight gain for the day but ran out of steam on Friday and failed to hit that new record close. That said, it was a good year for the markets as there were double digit gains for all the major indices. Led by Mega Cap tech, the NASDAQ 100 had its best year since 2020. This bullish run has now broadened as the small-cap Russell 2000 rose more than 12% in December, clinching its best month since November 2020 and notching its best quarter since 2020s fourth. From a technical perspective, the Santa Claus Rally has a positive return with the first two trading days in January to go. Tuesday also marks the beginning of the First Five Trading Days indicator as a predictor of market performance for the year. If the S&P 500 is up during those five days, there is a high probability that it will be up for the year. Since 1950 there have been 47 up periods and 39 of them had a positive annual return for an 83% success rate. But lets also look back at another predictor, that being those last two months of 2023 where the S&P 500 gained more than 10% in November through December. Since 1954, there have been six instances where this has occurred and in all six instances, we had positive returns over the next year with the average and median returns being 19.5% and 19.2% respectively. For next week we get the FOMC minutes on Wednesday and before Fridays open the Non-Farm Payrolls report, and hopefully new record highs for the S&P 500. For TSP TIPS the C fund made a new All-time high on Thursday, while the S, I and F funds made new 52 week highs on Wednesday. The S fund still ranks at the top of the Performance Ranking leaderboard, and when we peeled the onion back came up with the following. For 2023, the S funds total return was 25.3%, and from 27 October to 31 December it was 24.9%. Or to put it another way, the S fund pretty much made all of its annual gain in the last two months of the year. As such, we recommend no changes to our current investment mix.
The S&P 500 continued upward extending its weekly up streak to nine in a row, its best win streak since 2004, and closing Friday at 4769.83. The holiday shortened week brought in low volume and no major economic news, but the S&P 500 kept chugging upward and got within 3 points of its All time closing high on Thursday morning. It still eked out a slight gain for the day but ran out of steam on Friday and failed to hit that new record close. That said, it was a good year for the markets as there were double digit gains for all the major indices. Led by Mega Cap tech, the NASDAQ 100 had its best year since 2020. This bullish run has now broadened as the small-cap Russell 2000 rose more than 12% in December, clinching its best month since November 2020 and notching its best quarter since 2020s fourth. From a technical perspective, the Santa Claus Rally has a positive return with the first two trading days in January to go. Tuesday also marks the beginning of the First Five Trading Days indicator as a predictor of market performance for the year. If the S&P 500 is up during those five days, there is a high probability that it will be up for the year. Since 1950 there have been 47 up periods and 39 of them had a positive annual return for an 83% success rate. But lets also look back at another predictor, that being those last two months of 2023 where the S&P 500 gained more than 10% in November through December. Since 1954, there have been six instances where this has occurred and in all six instances, we had positive returns over the next year with the average and median returns being 19.5% and 19.2% respectively. For next week we get the FOMC minutes on Wednesday and before Fridays open the Non-Farm Payrolls report, and hopefully new record highs for the S&P 500. For TSP TIPS the C fund made a new All-time high on Thursday, while the S, I and F funds made new 52 week highs on Wednesday. The S fund still ranks at the top of the Performance Ranking leaderboard, and when we peeled the onion back came up with the following. For 2023, the S funds total return was 25.3%, and from 27 October to 31 December it was 24.9%. Or to put it another way, the S fund pretty much made all of its annual gain in the last two months of the year. As such, we recommend no changes to our current investment mix.