As we marked the end of 2024 and beginning of 2025, the S&P 500 closed lower on the week at 5,942. In the previous week, the S&P 500 closed down on Thursday, and then on Friday it notched a daily loss greater than 1%. Well that Grinch continued into this week with the S&P 500 notching another daily loss of greater than 1% on Monday. Tuesday was the last day of 2024, with the S&P 500 closing out the year with four consecutive days of losses, a first going back to 1966. And then Happy New Year!! Starting with a clean slate, the S&P 500 stumbled out of the blocks and was down on Thursday, making it five down days in a row. Friday marked the last day of the Santa Claus Rally (SCR) period, and it broke that down streak with all 11 S&P 500 sectors up and a gain of over 1%. However, the Grinch won this years SCR as the S&P 500 posted a loss. So the next question is, What happens when the SCR does not rally? Historically, the S&P 500's average return in those years tends to be weaker with annual returns about half that in years with one (5% vs. 10.4%). But the SCR is just the first in a trifecta of New Year indicators, the others being Januarys First Five Days (FFD) and the January Barometer (JB). FFD is just that, with the last 48 up FFD followed by full-year gains 40 times and a 48 year average of 14.2%. That said, the JB is as January goes, so does the year, and since 1950 that saying has an 83.8% accuracy rate. For next week the big economic data will be the payrolls and unemployment numbers on Friday. For TSP TIPS our last investment mix was last Monday, and we are currently about 50% in cash. The C and S funds Performance Ranking (PR) and Composite Scores (CS) are positive and almost equal, while the I and F funds PRs are negative with the I fund having a CS of zero. As such we recommend no changes to our current investment mix. Lastly, on Wednesday, 8 January at 5 PM Eastern we will be having an End of Year/Year Ahead zoom call so please mark your calendars. Meeting specifics to follow.
As we marked the end of 2024 and beginning of 2025, the S&P 500 closed lower on the week at 5,942. In the previous week, the S&P 500 closed down on Thursday, and then on Friday it notched a daily loss greater than 1%. Well that Grinch continued into this week with the S&P 500 notching another daily loss of greater than 1% on Monday. Tuesday was the last day of 2024, with the S&P 500 closing out the year with four consecutive days of losses, a first going back to 1966. And then Happy New Year!! Starting with a clean slate, the S&P 500 stumbled out of the blocks and was down on Thursday, making it five down days in a row. Friday marked the last day of the Santa Claus Rally (SCR) period, and it broke that down streak with all 11 S&P 500 sectors up and a gain of over 1%. However, the Grinch won this years SCR as the S&P 500 posted a loss. So the next question is, What happens when the SCR does not rally? Historically, the S&P 500's average return in those years tends to be weaker with annual returns about half that in years with one (5% vs. 10.4%). But the SCR is just the first in a trifecta of New Year indicators, the others being Januarys First Five Days (FFD) and the January Barometer (JB). FFD is just that, with the last 48 up FFD followed by full-year gains 40 times and a 48 year average of 14.2%. That said, the JB is as January goes, so does the year, and since 1950 that saying has an 83.8% accuracy rate. For next week the big economic data will be the payrolls and unemployment numbers on Friday. For TSP TIPS our last investment mix was last Monday, and we are currently about 50% in cash. The C and S funds Performance Ranking (PR) and Composite Scores (CS) are positive and almost equal, while the I and F funds PRs are negative with the I fund having a CS of zero. As such we recommend no changes to our current investment mix. Lastly, on Wednesday, 8 January at 5 PM Eastern we will be having an End of Year/Year Ahead zoom call so please mark your calendars. Meeting specifics to follow.