With five straight up days, the S&P 500 broke a four-week losing streak and closed Friday at 5,554. While the S&P 500 gained only 0.23 points on Monday, it still was a positive day. This was followed by three days of before the open economic reports. On Tuesday the July Year over Year Producer Price Index came in at 2.2%, easing from an upwardly revised 2.7% gain in June and below market expectations of 2.3%. With that good news the S&P 500 gapped up at the open and closed at session highs with a daily gain of over 1%. On Wednesday Julys annual inflation rate slowed for a fourth consecutive month to 2.9%, the lowest since March 2021. The markets rallied again and then, on Thursday, July retail sales soared 1% month-over-month for its biggest increase since January 2023. The S&P 500 tagged on another gap up at the open and daily increase of over 1%. Finally, on Friday the University of Michigan August consumer sentiment rose to 67.8, up from 66.4 and marking the first increase in five months. And with that we reversed the S&P 500 four-week losing streak. From a technical perspective, most major market indices, including the S&P 500, saw their prices move back above their 50 day Moving Averages (MA). We also saw their 10 day Exponential MA (EMA) cross above their 20 day MA, another bullish signal. Next week will be dominated with Fed news as they hold their Jackson Hole meeting on Wednesday through Friday, with Fed chair Powell speaking on Friday. For TSP TIPS this break of the four-week losing streak and concurrent reversal has increased our bullish tone. As mentioned above, all three equity funds (C/S/I) had their prices cross above their 50 MAs and also their 10 EMAs cross above their 20 MAs this week. From a Performance Ranking standpoint, the C fund is at the top of the leaderboard with the I fund overtaking the S fund for runner up. As such, we are recommending an incremental increase in our equity investment mix, and will go 100% invested when we 1) see their 20 MAs cross above their 50 MAs and 2) see them take out the high of their last two weekly red bars (for the S&P 500/C fund that is 5,585.34).
With five straight up days, the S&P 500 broke a four-week losing streak and closed Friday at 5,554. While the S&P 500 gained only 0.23 points on Monday, it still was a positive day. This was followed by three days of before the open economic reports. On Tuesday the July Year over Year Producer Price Index came in at 2.2%, easing from an upwardly revised 2.7% gain in June and below market expectations of 2.3%. With that good news the S&P 500 gapped up at the open and closed at session highs with a daily gain of over 1%. On Wednesday Julys annual inflation rate slowed for a fourth consecutive month to 2.9%, the lowest since March 2021. The markets rallied again and then, on Thursday, July retail sales soared 1% month-over-month for its biggest increase since January 2023. The S&P 500 tagged on another gap up at the open and daily increase of over 1%. Finally, on Friday the University of Michigan August consumer sentiment rose to 67.8, up from 66.4 and marking the first increase in five months. And with that we reversed the S&P 500 four-week losing streak. From a technical perspective, most major market indices, including the S&P 500, saw their prices move back above their 50 day Moving Averages (MA). We also saw their 10 day Exponential MA (EMA) cross above their 20 day MA, another bullish signal. Next week will be dominated with Fed news as they hold their Jackson Hole meeting on Wednesday through Friday, with Fed chair Powell speaking on Friday. For TSP TIPS this break of the four-week losing streak and concurrent reversal has increased our bullish tone. As mentioned above, all three equity funds (C/S/I) had their prices cross above their 50 MAs and also their 10 EMAs cross above their 20 MAs this week. From a Performance Ranking standpoint, the C fund is at the top of the leaderboard with the I fund overtaking the S fund for runner up. As such, we are recommending an incremental increase in our equity investment mix, and will go 100% invested when we 1) see their 20 MAs cross above their 50 MAs and 2) see them take out the high of their last two weekly red bars (for the S&P 500/C fund that is 5,585.34).