The S&P 500 broke a streak of two consecutive down weeks, rebounding to a new record high as it closed at 6,173 on Friday. Coming off a weekend of uncertainty after the Iran strike, Mondays S&P 500 open started on a positive note as it popped above 6,000 in the morning, only to fall back below that level during the lunch hour. But then Qatars Defense Ministry said that its air defense had intercepted Irans retaliatory strike on a U.S. military base, and the S&P 500 closed at session highs. That good news continued into Tuesday with the S&P 500 gapping up at the open as oil prices fell on bets that the ceasefire between Iran and Israel could last. With an S&P 500 daily gain of over 1%, it stood less than 1% off its record high. Wednesday was the only down day of the week for the S&P 500, but it was hardly noted as the loss was two 100s of a point, or -0.02 points. On Thursday we turned back to tariffs as Commerce Secretary Lutnick announced that a framework between China and the U.S. on trade had been finalized, adding that the administration expects to reach deals with 10 major trading partners imminently. That drove the S&P 500 up to 6,141, just three points shy of a new record. Before Fridays open the Personal Consumption Expenditures (PCE) price index rose by 0.1% in May, the same as April and in line with expectations. The markets reacted positively and the S&P 500 moved into record territory, but then came news about U.S.-Canada tariffs and the S&P 500 fell to 6,132. However, traders shrugged off that news in the last hour and the S&P 500 did close at a new record high of 6,171. All told, last weekends uncertainty morphed into this weekends resiliency. From a technical perspective, the NASDAQ 100 also joined the S&P 500 with new record highs this week, and hopefully this bullishness will continue into July. So whats next? This move to new record highs is significant. Next week is holiday shortened with the markets closing at 1300 on Thursday for the July 4th weekend. As such the monthly payrolls/unemployment report comes out before Thursdays open. In mid-July we get the inflations numbers and earnings season begins. Good news in those numbers could have a positive influence with the Fed reducing rates on 30 July after four consecutive unchanged months. For TSP TIPS this weeks resiliency came with an improvement in technical indicators, signaling a breakout to the upside. Although the TSP has yet to post Fridays closing prices, both the I and C funds made new record highs on Thursday, and most likely Friday as their underlying indices had gains. Both the I and C funds have Composite Scores (CS) of 100, with the S fund right behind at 95. And all three equity funds saw increases in their Performance Rankings (PR) this week, with the I fund at the top of the leaderboard, C fund right behind, with the S fund in third but closing the gap. While we are showing you the factors behind our investment mix decisions, the difference between all three is much closer than what it was at 7 Aprils lows when the PRs for all three funds were negative with the C and S funds in minus double-digit territory. As such we recommend a return to a 100% equity position in all three models. In the Aggressive model you should have one June reallocation available, so execute the investment mix on Monday. If not, execute on Tuesday. In the Moderate and Conservative models also reallocate on Monday if you have one remaining investment mix available. Most likely you wont since weve already pushed two June investment mixes. As such, submit your new investment mix on Tuesday, 1 July. This sets us up for 100% equity in July with possible new investment mixes in mid-July for PR leaderboard changes. Lastly, we hope everyone enjoys your long July 4th weekend!!
The S&P 500 broke a streak of two consecutive down weeks, rebounding to a new record high as it closed at 6,173 on Friday. Coming off a weekend of uncertainty after the Iran strike, Mondays S&P 500 open started on a positive note as it popped above 6,000 in the morning, only to fall back below that level during the lunch hour. But then Qatars Defense Ministry said that its air defense had intercepted Irans retaliatory strike on a U.S. military base, and the S&P 500 closed at session highs. That good news continued into Tuesday with the S&P 500 gapping up at the open as oil prices fell on bets that the ceasefire between Iran and Israel could last. With an S&P 500 daily gain of over 1%, it stood less than 1% off its record high. Wednesday was the only down day of the week for the S&P 500, but it was hardly noted as the loss was two 100s of a point, or -0.02 points. On Thursday we turned back to tariffs as Commerce Secretary Lutnick announced that a framework between China and the U.S. on trade had been finalized, adding that the administration expects to reach deals with 10 major trading partners imminently. That drove the S&P 500 up to 6,141, just three points shy of a new record. Before Fridays open the Personal Consumption Expenditures (PCE) price index rose by 0.1% in May, the same as April and in line with expectations. The markets reacted positively and the S&P 500 moved into record territory, but then came news about U.S.-Canada tariffs and the S&P 500 fell to 6,132. However, traders shrugged off that news in the last hour and the S&P 500 did close at a new record high of 6,171. All told, last weekends uncertainty morphed into this weekends resiliency. From a technical perspective, the NASDAQ 100 also joined the S&P 500 with new record highs this week, and hopefully this bullishness will continue into July. So whats next? This move to new record highs is significant. Next week is holiday shortened with the markets closing at 1300 on Thursday for the July 4th weekend. As such the monthly payrolls/unemployment report comes out before Thursdays open. In mid-July we get the inflations numbers and earnings season begins. Good news in those numbers could have a positive influence with the Fed reducing rates on 30 July after four consecutive unchanged months. For TSP TIPS this weeks resiliency came with an improvement in technical indicators, signaling a breakout to the upside. Although the TSP has yet to post Fridays closing prices, both the I and C funds made new record highs on Thursday, and most likely Friday as their underlying indices had gains. Both the I and C funds have Composite Scores (CS) of 100, with the S fund right behind at 95. And all three equity funds saw increases in their Performance Rankings (PR) this week, with the I fund at the top of the leaderboard, C fund right behind, with the S fund in third but closing the gap. While we are showing you the factors behind our investment mix decisions, the difference between all three is much closer than what it was at 7 Aprils lows when the PRs for all three funds were negative with the C and S funds in minus double-digit territory. As such we recommend a return to a 100% equity position in all three models. In the Aggressive model you should have one June reallocation available, so execute the investment mix on Monday. If not, execute on Tuesday. In the Moderate and Conservative models also reallocate on Monday if you have one remaining investment mix available. Most likely you wont since weve already pushed two June investment mixes. As such, submit your new investment mix on Tuesday, 1 July. This sets us up for 100% equity in July with possible new investment mixes in mid-July for PR leaderboard changes. Lastly, we hope everyone enjoys your long July 4th weekend!!