The S&P 500 resumed its downward trend, making it five down weeks out of the last six, and closing Friday at 5,580. Again, tariff talks dominated market action throughout the week. Monday started off on a positive note with news that the White House may narrow the scope of tariffs. That sent the S&P 500 to a daily gain of over 1% and the best Monday since 17 October 2022. On Tuesday the markets closed slightly higher after President Trump said that tariffs will likely be more lenient than reciprocal. However, uncertainty about tariffs again roiled the markets on Wednesday as the S&P has a second daily move of over 1%, but this one was down with the S&P 500 closing just above the 5,700 level. Thursday came with the announcement of 25% tariffs, and a second day of losses, with the S&P 500 now closing just below the 5,700 level. Before Fridays open the February core Personal Consumption Expenditures (PCE) price index came out hotter than expected, annually rising to 2.8% (above 2.7% expectation), and a monthly increase of 0.4% (above 0.3% expectation). As such, the S&P 500 gapped down at the open and by lunchtime, we had blown right through the 5,600 level. Closing near session lows, the S&P 500 notched nearly a 2% daily loss. From a technical perspective, a key support level for the S&P 500 is the 13 March closing low of 5,521. Were only about 1% above that now, so a close below will also be a new Year To Date low. The next concern would be a further selloff to 4,915, which is 20% off the 19 February record closing high, i.e. bear market territory. For next week 2 April is the effective date of tariffs, so expect more market volatility. For TSP TIPS we again see the C and S funds with low Composite Scores (CS), negative Performance Rankings (PR), and both down for the month of March. The I funds CS has come off its high, but the PR and March return are still positive. As such, it is time to take our third March investment mix and raise our cash allocation.
The S&P 500 resumed its downward trend, making it five down weeks out of the last six, and closing Friday at 5,580. Again, tariff talks dominated market action throughout the week. Monday started off on a positive note with news that the White House may narrow the scope of tariffs. That sent the S&P 500 to a daily gain of over 1% and the best Monday since 17 October 2022. On Tuesday the markets closed slightly higher after President Trump said that tariffs will likely be more lenient than reciprocal. However, uncertainty about tariffs again roiled the markets on Wednesday as the S&P has a second daily move of over 1%, but this one was down with the S&P 500 closing just above the 5,700 level. Thursday came with the announcement of 25% tariffs, and a second day of losses, with the S&P 500 now closing just below the 5,700 level. Before Fridays open the February core Personal Consumption Expenditures (PCE) price index came out hotter than expected, annually rising to 2.8% (above 2.7% expectation), and a monthly increase of 0.4% (above 0.3% expectation). As such, the S&P 500 gapped down at the open and by lunchtime, we had blown right through the 5,600 level. Closing near session lows, the S&P 500 notched nearly a 2% daily loss. From a technical perspective, a key support level for the S&P 500 is the 13 March closing low of 5,521. Were only about 1% above that now, so a close below will also be a new Year To Date low. The next concern would be a further selloff to 4,915, which is 20% off the 19 February record closing high, i.e. bear market territory. For next week 2 April is the effective date of tariffs, so expect more market volatility. For TSP TIPS we again see the C and S funds with low Composite Scores (CS), negative Performance Rankings (PR), and both down for the month of March. The I funds CS has come off its high, but the PR and March return are still positive. As such, it is time to take our third March investment mix and raise our cash allocation.