The S&P 500 was down for a fourth consecutive week as it closed at 6,506 on Friday. Again the effects of the war continue to drive the markets lower as uncertainty mounts and oil and gas prices at the pump surge. Like we have in the past few weeks, lets look at the economic news and the numbers. The biggest news came Wednesday as the Fed held tight on interest rates, but did hint that a possible rate hike could be in the offing to combat rising inflation. Evidence of this was the February producer price index number, which tracks the change in wholesale prices, rising 0.7% which was well above the 0.3% estimate. From a technical perspective, the S&P 500 dropped below its 200 day Moving Average (MA) on Thursday, ending the bullish run that started on 19 May 2025. Friday also saw the small-cap Russell 2000 declining more than 2% and slipped into correction territory, a 10% decline from its latest high. At their lows of the day, the Dow and NASDAQ also traded in correction territory but ultimately closed shy of that 10% threshold. And for the S&P 500, around four out of every five stocks slid on Friday, underscoring the breadth of the stock markets drawdown. And to top that off, gold was down more than 8% on the week, posting its worst weekly decline in about six years. For next week no major economic news is on the docket, but the markets will most probably be impacted by the possibility of the Middle Eastern war expanding from the Sea and Air to include the Ground. For TSP TIPS weve seen a steady deterioration of both their Composite Scores (CS) and Performance Rankings (PR) over the past few weeks. The I fund still leads in both categories, but its CS has dropped to 30 and its PR is just above zero. Meanwhile the C and S funds have now dropped into negative PR territory. That said, we are now recommending our third March investment mix reallocation with a further increase into the G fund in all three models, with the Conservative model going 100% cash, pretty much as high as you go. It should be noted that this will most likely be our last risk-off allocation as we anticipate our next trades will be on the bullish side, i.e. the two available in April. While both the Aggressive and Moderate models will still have a small equity slice remaining, now might be the time to consider moving to the Conservative model and then switching back as the market improves. With three TSP TIPS models, you have the flexibility to switch from the Aggressive to Moderate to Conservative models as the CS and PR decrease, and then reverse that sequence as the CS and PR improve. Just something to consider in these uncertain times.
The S&P 500 was down for a fourth consecutive week as it closed at 6,506 on Friday. Again the effects of the war continue to drive the markets lower as uncertainty mounts and oil and gas prices at the pump surge. Like we have in the past few weeks, lets look at the economic news and the numbers. The biggest news came Wednesday as the Fed held tight on interest rates, but did hint that a possible rate hike could be in the offing to combat rising inflation. Evidence of this was the February producer price index number, which tracks the change in wholesale prices, rising 0.7% which was well above the 0.3% estimate. From a technical perspective, the S&P 500 dropped below its 200 day Moving Average (MA) on Thursday, ending the bullish run that started on 19 May 2025. Friday also saw the small-cap Russell 2000 declining more than 2% and slipped into correction territory, a 10% decline from its latest high. At their lows of the day, the Dow and NASDAQ also traded in correction territory but ultimately closed shy of that 10% threshold. And for the S&P 500, around four out of every five stocks slid on Friday, underscoring the breadth of the stock markets drawdown. And to top that off, gold was down more than 8% on the week, posting its worst weekly decline in about six years. For next week no major economic news is on the docket, but the markets will most probably be impacted by the possibility of the Middle Eastern war expanding from the Sea and Air to include the Ground. For TSP TIPS weve seen a steady deterioration of both their Composite Scores (CS) and Performance Rankings (PR) over the past few weeks. The I fund still leads in both categories, but its CS has dropped to 30 and its PR is just above zero. Meanwhile the C and S funds have now dropped into negative PR territory. That said, we are now recommending our third March investment mix reallocation with a further increase into the G fund in all three models, with the Conservative model going 100% cash, pretty much as high as you go. It should be noted that this will most likely be our last risk-off allocation as we anticipate our next trades will be on the bullish side, i.e. the two available in April. While both the Aggressive and Moderate models will still have a small equity slice remaining, now might be the time to consider moving to the Conservative model and then switching back as the market improves. With three TSP TIPS models, you have the flexibility to switch from the Aggressive to Moderate to Conservative models as the CS and PR decrease, and then reverse that sequence as the CS and PR improve. Just something to consider in these uncertain times.