Last week the S&P 500 had its worst week of the year, but rebounded this week with its best week in 2024, closing at 5,626. On Monday the rebound started with the S&P 500 gapping up at the open and from there the bull took over with a daily gain of over 1%. The rally continued into Tuesday, but all eyes were looking forward to the Consumer Price Index (CPI) number before Wednesdays open. When it was announced, it turned into a unique Core/Not Core day for the markets. Core CPI, which excludes volatile food and energy prices, increased 0.3% for the month, slightly higher than the 0.2% estimate, while the 12-month core inflation rate held at 3.2%, in line with the forecast. Initially the markets did not like that news and the S&P 500 fell sharply in the first 90 minutes of trading, down more than 1%. Then people started to realize that just plain old regular CPI, a broader measure of goods and services costs, increased 0.2% in August, in line with the consensus. That put the 12-month inflation rate at 2.5%, down 0.4% from the July level and the lowest since February 2021. The markets rebounded for the rest of the day with the S&P 500 closing up over 1%. Those 1% moves in both directions (2% range) in one day is something you do not see very often, making this day noteworthy as the first time since October 2022. On Thursday the Producer Prices Index (PPI) for August came in at an 1.7% annual rate, the lowest since February and down from Julys 2.1% annual increase, sparking more gains. Then, on Friday, the University of Michigan (UMICH) consumer sentiment increased for a second consecutive month to 69 in September, the highest since May and beating forecasts of 68. When all was said and done on Friday, the S&P 500 ran a streak of five straight up days, and closed less than 1% from its 16 July all-time closing high of 5,669. For next week we get the retail sales number on Monday. Tuesday marks the start of the Fed meeting, and then their rate decision on Wednesday afternoon. From that point on we are hopeful that well see continued bullishness in the last half of the week. For TSP TIPS all three equity funds (C/S/I) regained a bullish posture as all have their Price > 20 Moving Average (MA) > 50 MA > 200 MA. Looking at Performance Ranking, the C fund remains at the top of the leaderboard. However, on Friday the S fund had a 1.86% gain, leapfrogging it to second position over the I fund. As such, we recommend the following new investment mix.
Last week the S&P 500 had its worst week of the year, but rebounded this week with its best week in 2024, closing at 5,626. On Monday the rebound started with the S&P 500 gapping up at the open and from there the bull took over with a daily gain of over 1%. The rally continued into Tuesday, but all eyes were looking forward to the Consumer Price Index (CPI) number before Wednesdays open. When it was announced, it turned into a unique Core/Not Core day for the markets. Core CPI, which excludes volatile food and energy prices, increased 0.3% for the month, slightly higher than the 0.2% estimate, while the 12-month core inflation rate held at 3.2%, in line with the forecast. Initially the markets did not like that news and the S&P 500 fell sharply in the first 90 minutes of trading, down more than 1%. Then people started to realize that just plain old regular CPI, a broader measure of goods and services costs, increased 0.2% in August, in line with the consensus. That put the 12-month inflation rate at 2.5%, down 0.4% from the July level and the lowest since February 2021. The markets rebounded for the rest of the day with the S&P 500 closing up over 1%. Those 1% moves in both directions (2% range) in one day is something you do not see very often, making this day noteworthy as the first time since October 2022. On Thursday the Producer Prices Index (PPI) for August came in at an 1.7% annual rate, the lowest since February and down from Julys 2.1% annual increase, sparking more gains. Then, on Friday, the University of Michigan (UMICH) consumer sentiment increased for a second consecutive month to 69 in September, the highest since May and beating forecasts of 68. When all was said and done on Friday, the S&P 500 ran a streak of five straight up days, and closed less than 1% from its 16 July all-time closing high of 5,669. For next week we get the retail sales number on Monday. Tuesday marks the start of the Fed meeting, and then their rate decision on Wednesday afternoon. From that point on we are hopeful that well see continued bullishness in the last half of the week. For TSP TIPS all three equity funds (C/S/I) regained a bullish posture as all have their Price > 20 Moving Average (MA) > 50 MA > 200 MA. Looking at Performance Ranking, the C fund remains at the top of the leaderboard. However, on Friday the S fund had a 1.86% gain, leapfrogging it to second position over the I fund. As such, we recommend the following new investment mix.