The S&P 500 was down in this holiday shortened week, closing Friday at 5,282. Needless to say, tariffs again dominated the news. Monday gapped up and opened at 5,459 on weekend news of exemptions from reciprocal tariffs for electronic products such as smartphones, computers and semiconductors. However, that level turned out to be the high point for the week. Tuesdays move was muted with a slight loss, but all that changed on Wednesday as the S&P 500 gapped down at the open. Stocks fell sharply in the morning as shares of Nvidia sank 6.9% after stating it will post a $5.5 billion quarterly charge related to exporting its H20 graphics processing units to China and other nations. And that downward move continued into the afternoon as Fed Chair Powell said that tariffs could pose a challenge for the central bank by driving up inflation, likely moving us further away from our goals. All told, the S&P 500 closed at session lows with a daily loss of over 2%. On Thursday the S&P 500 was up slightly, but down 1.5% for the week. From a technical perspective, the S&P 500 experienced a Death Cross Monday when its 50 day Moving Average (MA) closed BELOW its 200 MA, signaling a sell signal. And the buy signal is when the 50 MA crosses ABOVE the 200 MA, and that was on 3 February 2023 at 4,136. Over those 26 months the S&P 500 gained 30.5%, increasing the median gain to 14.11% and making it the 22nd winning trade out of 29 dating back to 22 October 1970. Now lets look at bounce back. On Tuesday 8 April both the S&P 500 and International EFA ETF were at 52-week lows. The next day the S&P 500 gained that historic 9.52%, but has now fallen back to only a 6.02% gain since 8 April. Conversely, the EFA ETF closed Thursday at its best level since 8 April with an 11.16% gain. Meanwhile, the Performance Ranking (PR) for the EFA ETF has turned positive, while the S&P 500 remains mired in negative PR territory. As such we are seeing another trend with international sectors leading the way. For next week economic news is light, but we will see the Tesla and Alphabet earnings reports on Tuesday and Thursday respectively. For TSP TIPS the setting is similar to the above as the I fund is the only equity (C/S/I) fund with a positive Performance Ranking. And on 8 April it closed at $39.69, while on Thursday 17 April it closed at $43.67, up just over 10%. As such we are recommending a new investment mix with an I fund allocation.
The S&P 500 was down in this holiday shortened week, closing Friday at 5,282. Needless to say, tariffs again dominated the news. Monday gapped up and opened at 5,459 on weekend news of exemptions from reciprocal tariffs for electronic products such as smartphones, computers and semiconductors. However, that level turned out to be the high point for the week. Tuesdays move was muted with a slight loss, but all that changed on Wednesday as the S&P 500 gapped down at the open. Stocks fell sharply in the morning as shares of Nvidia sank 6.9% after stating it will post a $5.5 billion quarterly charge related to exporting its H20 graphics processing units to China and other nations. And that downward move continued into the afternoon as Fed Chair Powell said that tariffs could pose a challenge for the central bank by driving up inflation, likely moving us further away from our goals. All told, the S&P 500 closed at session lows with a daily loss of over 2%. On Thursday the S&P 500 was up slightly, but down 1.5% for the week. From a technical perspective, the S&P 500 experienced a Death Cross Monday when its 50 day Moving Average (MA) closed BELOW its 200 MA, signaling a sell signal. And the buy signal is when the 50 MA crosses ABOVE the 200 MA, and that was on 3 February 2023 at 4,136. Over those 26 months the S&P 500 gained 30.5%, increasing the median gain to 14.11% and making it the 22nd winning trade out of 29 dating back to 22 October 1970. Now lets look at bounce back. On Tuesday 8 April both the S&P 500 and International EFA ETF were at 52-week lows. The next day the S&P 500 gained that historic 9.52%, but has now fallen back to only a 6.02% gain since 8 April. Conversely, the EFA ETF closed Thursday at its best level since 8 April with an 11.16% gain. Meanwhile, the Performance Ranking (PR) for the EFA ETF has turned positive, while the S&P 500 remains mired in negative PR territory. As such we are seeing another trend with international sectors leading the way. For next week economic news is light, but we will see the Tesla and Alphabet earnings reports on Tuesday and Thursday respectively. For TSP TIPS the setting is similar to the above as the I fund is the only equity (C/S/I) fund with a positive Performance Ranking. And on 8 April it closed at $39.69, while on Thursday 17 April it closed at $43.67, up just over 10%. As such we are recommending a new investment mix with an I fund allocation.