This week played out as expected for the first four days, but then came Friday which saw the S&P 500 closing down at 6,827. The first half of the week was dominated by FedWatch, waiting for the FOMC interest rate announcement on Wednesday afternoon. In Mondays trading session, tech stocks were the winner as it was the only sector out of the 11 S&P 500 sectors that closed in the green. Shares of Broadcom (AVGO) closed at $401, rising almost 3% on news that Microsoft is considering designing custom chips with them. And FedWatch continued into Tuesday as the S&P 500 closed relatively unchanged. On Wednesday the S&P 500 continued that relatively flat trend, but all that changed at 1400 when the Fed announced an interest rate cut for the third time this year. In the next 90 minutes the S&P 500 set a new intraday record high when it crossed above 6,900, but fell off in the last 30 minutes closing just shy of a new record closing high. That said, the Russell 2000 index of small-capitalization stocks did notch a record close. On Thursday investors poured into cyclical stocks that are considered more sensitive to the economy, while taking profits in growth-oriented names tied to the artificial intelligence trade. However, the S&P 500 continued marching upward and closed at a new record high of 6,901. AVGO closed at $406 and then reported earnings, saying the company beat fourth-quarter expectations and gave a strong forecast for the current quarter with artificial intelligence chip sales looking to double. However, someone let the bear out during the night, and it wreaked havoc at Fridays open. By noon the S&P 500 had dropped an even 100 points and was sitting at 6,801. It tried to rally in the afternoon, but by the close it had a daily loss of greater than 1%. Oh by the way, AVGO closed at $359, down 11.43% on the day. From a technical perspective Fridays drop was a disappointment as it gave more credence to the markets move up like an escalator, but drop like an elevator. We also must remember that we did set those new record highs on Thursday, and the markets do not move up in a straight line. On a bullish note, this weeks high and low were both higher than the previous week, marking the third consecutive week of higher highs and higher lows. For next week we get inflation numbers on Thursday and will hopefully see a rebound in the last full trading week of the year. For TSP TIPS all three equity funds set new record highs on Wednesday and Thursday. Just for reference, the last time all three had back-to-back record days was on 24 and 27 October 2025. Also, both the C and I funds have Composite Scores (CS) of 100, and the S fund is tracking towards tying that CS next week. As such, we recommend no changes in our current investment mixes. All told, hopefully well see the bull knock the bear out of the ring as we close out 2025.
This week played out as expected for the first four days, but then came Friday which saw the S&P 500 closing down at 6,827. The first half of the week was dominated by FedWatch, waiting for the FOMC interest rate announcement on Wednesday afternoon. In Mondays trading session, tech stocks were the winner as it was the only sector out of the 11 S&P 500 sectors that closed in the green. Shares of Broadcom (AVGO) closed at $401, rising almost 3% on news that Microsoft is considering designing custom chips with them. And FedWatch continued into Tuesday as the S&P 500 closed relatively unchanged. On Wednesday the S&P 500 continued that relatively flat trend, but all that changed at 1400 when the Fed announced an interest rate cut for the third time this year. In the next 90 minutes the S&P 500 set a new intraday record high when it crossed above 6,900, but fell off in the last 30 minutes closing just shy of a new record closing high. That said, the Russell 2000 index of small-capitalization stocks did notch a record close. On Thursday investors poured into cyclical stocks that are considered more sensitive to the economy, while taking profits in growth-oriented names tied to the artificial intelligence trade. However, the S&P 500 continued marching upward and closed at a new record high of 6,901. AVGO closed at $406 and then reported earnings, saying the company beat fourth-quarter expectations and gave a strong forecast for the current quarter with artificial intelligence chip sales looking to double. However, someone let the bear out during the night, and it wreaked havoc at Fridays open. By noon the S&P 500 had dropped an even 100 points and was sitting at 6,801. It tried to rally in the afternoon, but by the close it had a daily loss of greater than 1%. Oh by the way, AVGO closed at $359, down 11.43% on the day. From a technical perspective Fridays drop was a disappointment as it gave more credence to the markets move up like an escalator, but drop like an elevator. We also must remember that we did set those new record highs on Thursday, and the markets do not move up in a straight line. On a bullish note, this weeks high and low were both higher than the previous week, marking the third consecutive week of higher highs and higher lows. For next week we get inflation numbers on Thursday and will hopefully see a rebound in the last full trading week of the year. For TSP TIPS all three equity funds set new record highs on Wednesday and Thursday. Just for reference, the last time all three had back-to-back record days was on 24 and 27 October 2025. Also, both the C and I funds have Composite Scores (CS) of 100, and the S fund is tracking towards tying that CS next week. As such, we recommend no changes in our current investment mixes. All told, hopefully well see the bull knock the bear out of the ring as we close out 2025.