The S&P 500 notched its second-straight down week, closing Friday at 5117. Monday was flat as the markets were waiting for the Consumer Price Index (CPI) number to come in prior to Tuesdays open. When that number came in at 0.4% for February and 3.2% annually, the markets reacted positively with a daily gain of over 1%. Wednesday was a repeat of Monday with the markets waiting for the Producer Price Index (PPI) index to come in prior to Thursdays open. PPI came in with a monthly rise of 0.6%, well above the 0.3% expectation and marking its largest increase since last August. Reversing Tuesdays gains, from Thursdays open through Fridays close the S&P 500 trended downward for a loss of over 1%. Those last two days also saw Bitcoin make a new all-time high and the 10 year Treasury climb to an intraweek high of 4.32%, just shy of the 2024 high of 4.35%. From a technical perspective, we have mentioned that higher intraweek highs and higher intraweek lows were a bullish sign. For the S&P 500, two weeks ago we had a higher high but lower low. This week we had lower high but higher low. Were also seeing the Bollinger Band (BB) width collapsing from 225 last Friday to 120 this Friday. Lastly, next Wednesday the Fed will give us their interest rate decision and theres a strong likelihood they will keep rates unchanged. When you combine these four items (10 year yield + higher highs + BB + Fed), it looks like we could be heading for a period of consolidation. For TSP TIPS the C fund made a new all-time high on Tuesday and stays at the top of the Performance Ranking leaderboard. However, we did see the I fund leap over the S fund for the number 2 position. When you balance this with that potential consolidation period, we recommend the following new investment mix.
The S&P 500 notched its second-straight down week, closing Friday at 5117. Monday was flat as the markets were waiting for the Consumer Price Index (CPI) number to come in prior to Tuesdays open. When that number came in at 0.4% for February and 3.2% annually, the markets reacted positively with a daily gain of over 1%. Wednesday was a repeat of Monday with the markets waiting for the Producer Price Index (PPI) index to come in prior to Thursdays open. PPI came in with a monthly rise of 0.6%, well above the 0.3% expectation and marking its largest increase since last August. Reversing Tuesdays gains, from Thursdays open through Fridays close the S&P 500 trended downward for a loss of over 1%. Those last two days also saw Bitcoin make a new all-time high and the 10 year Treasury climb to an intraweek high of 4.32%, just shy of the 2024 high of 4.35%. From a technical perspective, we have mentioned that higher intraweek highs and higher intraweek lows were a bullish sign. For the S&P 500, two weeks ago we had a higher high but lower low. This week we had lower high but higher low. Were also seeing the Bollinger Band (BB) width collapsing from 225 last Friday to 120 this Friday. Lastly, next Wednesday the Fed will give us their interest rate decision and theres a strong likelihood they will keep rates unchanged. When you combine these four items (10 year yield + higher highs + BB + Fed), it looks like we could be heading for a period of consolidation. For TSP TIPS the C fund made a new all-time high on Tuesday and stays at the top of the Performance Ranking leaderboard. However, we did see the I fund leap over the S fund for the number 2 position. When you balance this with that potential consolidation period, we recommend the following new investment mix.