The S&P 500 posted its first positive weekly return of 2025 and biggest advance since Novembers election week, closing just shy of 6K at 5,996. On Monday the S&P 500 eked out a small gain even though the 10-year Treasury note breached the 4.8% mark, the highest level in 14 months. On Tuesday Decembers Producer Price Index (PPI) came in at 0.2%, less than Novembers 0.4% and below the 0.4% estimate, and the S&P 500 eked out another small gain. Before Wednesdays open the Consumer Price Index (CPI) increased 0.4% for December, putting the 12-month inflation rate at 2.9%. However, the core CPI annual rate was 3.2%, down from the previous month and slightly better than the 3.3% forecast. With that news and good bank earnings reports, the S&P 500 gapped up at the open and had its best day since the election. On Thursday the markets took a breather, but with continued good bank earnings, the S&P 500 rebounded on Friday with a daily gain of 1%. And, with those good PPI and CPI numbers, the 10-year Treasury note ended the week lower at 4.61%, which is good for equities. From a technical perspective, last Friday the S&P 500 was below both its 20 and 50 day Moving Averages (MA). This Friday it is above both!! For next week the markets are closed Monday, economic news is light, and earnings season continues. For TSP TIPS well refer back to the first sentence of this update. With this renewed bullishness, well increase our equity (C/S/I) exposure in a two-step process. The first step will be to transfer half on the G fund allocation into the equity funds before noon on Tuesday. If this bullishness continues through the end of January, well reallocate the G funds second half on Monday, 3 February. That said, this bullishness has also spread into Mutual Fund Window (MFW) TIPS. In MFW TIPS we went 100% cash on 19 December. On Friday the ProFunds Bitcoin fund (BTCFX) gave us a buy signal (purchase on Tuesday), and the ProFunds Ultra NASDAQ 100 fund (UOPIX) will probably also give us a buy this week. I mention this because if youve been thinking about using MFW TIPS, now is a good time since were starting a reversal to the upside. The first step of the two-step process would be modified to move half of your G fund allocation to the MFW, then follow MFW TIPS. The second step would remain the same, reallocate the second half of G fund per the 3 February TSP TIPS.
The S&P 500 posted its first positive weekly return of 2025 and biggest advance since Novembers election week, closing just shy of 6K at 5,996. On Monday the S&P 500 eked out a small gain even though the 10-year Treasury note breached the 4.8% mark, the highest level in 14 months. On Tuesday Decembers Producer Price Index (PPI) came in at 0.2%, less than Novembers 0.4% and below the 0.4% estimate, and the S&P 500 eked out another small gain. Before Wednesdays open the Consumer Price Index (CPI) increased 0.4% for December, putting the 12-month inflation rate at 2.9%. However, the core CPI annual rate was 3.2%, down from the previous month and slightly better than the 3.3% forecast. With that news and good bank earnings reports, the S&P 500 gapped up at the open and had its best day since the election. On Thursday the markets took a breather, but with continued good bank earnings, the S&P 500 rebounded on Friday with a daily gain of 1%. And, with those good PPI and CPI numbers, the 10-year Treasury note ended the week lower at 4.61%, which is good for equities. From a technical perspective, last Friday the S&P 500 was below both its 20 and 50 day Moving Averages (MA). This Friday it is above both!! For next week the markets are closed Monday, economic news is light, and earnings season continues. For TSP TIPS well refer back to the first sentence of this update. With this renewed bullishness, well increase our equity (C/S/I) exposure in a two-step process. The first step will be to transfer half on the G fund allocation into the equity funds before noon on Tuesday. If this bullishness continues through the end of January, well reallocate the G funds second half on Monday, 3 February. That said, this bullishness has also spread into Mutual Fund Window (MFW) TIPS. In MFW TIPS we went 100% cash on 19 December. On Friday the ProFunds Bitcoin fund (BTCFX) gave us a buy signal (purchase on Tuesday), and the ProFunds Ultra NASDAQ 100 fund (UOPIX) will probably also give us a buy this week. I mention this because if youve been thinking about using MFW TIPS, now is a good time since were starting a reversal to the upside. The first step of the two-step process would be modified to move half of your G fund allocation to the MFW, then follow MFW TIPS. The second step would remain the same, reallocate the second half of G fund per the 3 February TSP TIPS.