The words of the week were VALUATION and VOLATILITY as the S&P 500 broke a three-week winning streak, closing Friday at 6,728. Monday was a mixed session as the S&P 500 and NASDAQ 100 closed up while the Dow fell more than 200 points. Concerns about high levels of tech concentration were evidenced as more than 300 stocks in the S&P 500 closed in the red for the day, and in October, an up month, the number of S&P 500 stocks with gains was smaller than the amount that declined. After the bell, Palantir (PLTR) beat Wall Streets estimates for the third quarter and gave strong guidance, fueled by growth in its artificial intelligence business. However, PLTRs current P/E was approaching 700, and at that VALUATION investors sold off their holdings in extended hours, the S&P 500 gapped down at the Tuesdays open, PLTR shed 7%, and closing out a VOLATILE day the S&P 500 had a daily loss greater than 1%. However, on Wednesday those AI-tech stocks rebounded slightly, but it was short lived. On Thursday the AI VALUATION retreat continued, and the S&P 500 had another VOLATILE day with a daily loss of greater than 1%. That said, after Thursdays close Tesla (TSLA) reported that the VALUATION of Elon Musks 10 year pay package was nearly $1 trillion. On Friday the S&P 500 gapped down at the open, falling below 6,700. While government economic reporting has been sparse, the UMICH consumer sentiment survey was at its lowest point in more than three years with a monthly drop of nearly 11%. The S&P 500 hit an intraweek low around lunch time, but then rebounded in the afternoon to finish in positive territory. From a technical perspective, that S&P 500 Friday low hit the Bollinger Band lower level and found support with that bounce. For next week earnings season continues and hopefully the government shutdown will have a positive outcome. For TSP TIPS the C, S, and I funds were down for the week, but all remain within 5% of their most recent record highs hit in the last week of October. While no one can predict the future, we are recommending a slight decrease in equity exposure in all three models.
The words of the week were VALUATION and VOLATILITY as the S&P 500 broke a three-week winning streak, closing Friday at 6,728. Monday was a mixed session as the S&P 500 and NASDAQ 100 closed up while the Dow fell more than 200 points. Concerns about high levels of tech concentration were evidenced as more than 300 stocks in the S&P 500 closed in the red for the day, and in October, an up month, the number of S&P 500 stocks with gains was smaller than the amount that declined. After the bell, Palantir (PLTR) beat Wall Streets estimates for the third quarter and gave strong guidance, fueled by growth in its artificial intelligence business. However, PLTRs current P/E was approaching 700, and at that VALUATION investors sold off their holdings in extended hours, the S&P 500 gapped down at the Tuesdays open, PLTR shed 7%, and closing out a VOLATILE day the S&P 500 had a daily loss greater than 1%. However, on Wednesday those AI-tech stocks rebounded slightly, but it was short lived. On Thursday the AI VALUATION retreat continued, and the S&P 500 had another VOLATILE day with a daily loss of greater than 1%. That said, after Thursdays close Tesla (TSLA) reported that the VALUATION of Elon Musks 10 year pay package was nearly $1 trillion. On Friday the S&P 500 gapped down at the open, falling below 6,700. While government economic reporting has been sparse, the UMICH consumer sentiment survey was at its lowest point in more than three years with a monthly drop of nearly 11%. The S&P 500 hit an intraweek low around lunch time, but then rebounded in the afternoon to finish in positive territory. From a technical perspective, that S&P 500 Friday low hit the Bollinger Band lower level and found support with that bounce. For next week earnings season continues and hopefully the government shutdown will have a positive outcome. For TSP TIPS the C, S, and I funds were down for the week, but all remain within 5% of their most recent record highs hit in the last week of October. While no one can predict the future, we are recommending a slight decrease in equity exposure in all three models.