The S&P 500 scored a win this week, breaking a two week down streak and closing at 6,114 on Friday. On Monday big tech led the way with Nvidia, Micron Technology, Alphabet and Microsoft all positive. On Tuesday and Wednesday Fed Chair Powell appeared on Capitol Hill and stated that With our policy stance now significantly less restrictive than it had been and the economy remaining strong, we do not need to be in a hurry to adjust our policy stance. Wednesday also was the first of two days of inflation reports. Before Wednesdays open, the January consumer price index came in at 0.5%, with the annual inflation rate at 3%. Both were more than the 0.3% and 2.9% increases expected, and the S&P 500 gapped down at the open. However, it clawed its way back, regaining most of those losses by the closing bell. Before Thursday open Januarys producer price index came in at 0.4%, but below an upwardly revised 0.5% in December. Overall, investors shifted to a bullish view with those combined inflation numbers and drove the S&P 500 to a daily gain of over 1%, closing just three points shy of a new record high. On Friday the markets shrugged off a 0.9% slump in January retail sales, and the S&P 500 was basically flat for the entire session. From a technical perspective, Bollinger Band (BB) width has seen a marked decrease in the distance between its high and low levels. The BB Index (BBI) measures that distance, and it is now below 30 for the first time since the beginning of June 2024. This is important since it quantifies a consolidation period. And what follows consolidation is a breakout, and with the S&P 500 near the top of that BB distance (three points shy of a new record), the probability of that breakout being bullish increases. You can check this out on your favorite charting software and see the similarities between now and June 2024, when the S&P 500 had a nice run until mid-July. Next weeks economic news is pretty light with the FOMCs meeting minutes on Wednesday the only high impact event. The following week well get Nvidias earnings report. The last sentence in last weeks TSP TIPS update was we recommend holding off on making any investment mix reallocations until hopefully seeing a breakout to the upside. Well, based upon the Composite Scores of all three equity funds being 90 or greater, we are there. Also, the C fund takes the spotlight with a Composite Score of 100 and back-to-back new record highs on Thursday and Friday. Check it out at tsp.gov and click on Fund Performance/Share Price History. As such we are recommending the following new investment mix.
The S&P 500 scored a win this week, breaking a two week down streak and closing at 6,114 on Friday. On Monday big tech led the way with Nvidia, Micron Technology, Alphabet and Microsoft all positive. On Tuesday and Wednesday Fed Chair Powell appeared on Capitol Hill and stated that With our policy stance now significantly less restrictive than it had been and the economy remaining strong, we do not need to be in a hurry to adjust our policy stance. Wednesday also was the first of two days of inflation reports. Before Wednesdays open, the January consumer price index came in at 0.5%, with the annual inflation rate at 3%. Both were more than the 0.3% and 2.9% increases expected, and the S&P 500 gapped down at the open. However, it clawed its way back, regaining most of those losses by the closing bell. Before Thursday open Januarys producer price index came in at 0.4%, but below an upwardly revised 0.5% in December. Overall, investors shifted to a bullish view with those combined inflation numbers and drove the S&P 500 to a daily gain of over 1%, closing just three points shy of a new record high. On Friday the markets shrugged off a 0.9% slump in January retail sales, and the S&P 500 was basically flat for the entire session. From a technical perspective, Bollinger Band (BB) width has seen a marked decrease in the distance between its high and low levels. The BB Index (BBI) measures that distance, and it is now below 30 for the first time since the beginning of June 2024. This is important since it quantifies a consolidation period. And what follows consolidation is a breakout, and with the S&P 500 near the top of that BB distance (three points shy of a new record), the probability of that breakout being bullish increases. You can check this out on your favorite charting software and see the similarities between now and June 2024, when the S&P 500 had a nice run until mid-July. Next weeks economic news is pretty light with the FOMCs meeting minutes on Wednesday the only high impact event. The following week well get Nvidias earnings report. The last sentence in last weeks TSP TIPS update was we recommend holding off on making any investment mix reallocations until hopefully seeing a breakout to the upside. Well, based upon the Composite Scores of all three equity funds being 90 or greater, we are there. Also, the C fund takes the spotlight with a Composite Score of 100 and back-to-back new record highs on Thursday and Friday. Check it out at tsp.gov and click on Fund Performance/Share Price History. As such we are recommending the following new investment mix.