It was a record setting week for the S&P 500 as it hit three all-time highs before closing at 7,408 on Friday. On Monday the S&P 500 shook off rising oil prices to stubbornly climb to a new record high. Before Tuesdays open the annual consumer price index for April accelerated to 3.8%, mostly due to gasoline and fuel oil. As such, the S&P 500 sold off in the morning before rebounding in the afternoon for a slight loss. Before Wednesdays open Aprils producer price index came in much hotter than expected, rising 1.4% for the biggest monthly increase since March 2022. However, the markets shook off that news with the S&P 500 finishing near session highs with a second record high for the week. That bull run continued into Thursday with AI stocks leading the way, and the S&P 500 closing above 7,500 for the first time, the third record high this week. Stocks fell on Friday bogged down by losses in technology stocks and a rise in U.S. treasury yields after the Trump/Xi summit ended leaving traders worried about the lack of major policy breakthroughs. At the closing bell the S&P500 had a greater than 1% daily loss, but was still able to pull out a slight gain for the week, marking seven consecutive weeks of gains. So lets dig deeper. Going back to the inception of the S&P 500 in 1923, there have been just 40 seven+ week winning streaks, or approximately 1 every 2.5 years, with the last one (9 weeks) ending on 29 December 2023. The next obvious question surrounds how long the current winning streak may last. Roughly 80% of past seven-week winning streaks have failed to extend to 10 weeks, with only a handful stretching beyond that. Historical returns for the S&P 500 have also been generally strong following previous seven-week winning streaks, with higher-than-historical-average rates/occurrences as follows: next month 1.5% higher 73% of the time; next quarter 4.1% higher 83% of the time, and next year 13.0% higher 83% of the time. That would give us an S&P 500 of 8,371 in mid-May 2027. By the way, the longest S&P 500 winning streak was 14 weeks, set back in both 1927 and 1957. For next week we get the FOMC minutes on Wednesday as new Fed Chair Kevin Warsh begins his first full week of work. And also after Wednesdays close we get the Nvidia earnings report, the last of the Mag 7. For TSP TIPS the C fund has now reached the top of the Performance Ranking leaderboard, narrowly knocking the I fund into the runner up position, with the S fund remaining in third. For Composite Scores, the C fund remains at 100 while the I and S funds fell to 95 as their prices dipped below their 20 day Moving Averages. As such, we are recommending a new investment mix for the Aggressive and Conservative models. The Moderate model made a reallocation to the C fund last week, so we recommend holding off on your second reallocation until the end of the month. The plan is to send out our TSP TIPS second investment mix after the market close on Wednesday 27 May, for reallocation before noon on Thursday 28 May. This will allow us to fine-tune all three models second investment mix for May with a day to spare.
It was a record setting week for the S&P 500 as it hit three all-time highs before closing at 7,408 on Friday. On Monday the S&P 500 shook off rising oil prices to stubbornly climb to a new record high. Before Tuesdays open the annual consumer price index for April accelerated to 3.8%, mostly due to gasoline and fuel oil. As such, the S&P 500 sold off in the morning before rebounding in the afternoon for a slight loss. Before Wednesdays open Aprils producer price index came in much hotter than expected, rising 1.4% for the biggest monthly increase since March 2022. However, the markets shook off that news with the S&P 500 finishing near session highs with a second record high for the week. That bull run continued into Thursday with AI stocks leading the way, and the S&P 500 closing above 7,500 for the first time, the third record high this week. Stocks fell on Friday bogged down by losses in technology stocks and a rise in U.S. treasury yields after the Trump/Xi summit ended leaving traders worried about the lack of major policy breakthroughs. At the closing bell the S&P500 had a greater than 1% daily loss, but was still able to pull out a slight gain for the week, marking seven consecutive weeks of gains. So lets dig deeper. Going back to the inception of the S&P 500 in 1923, there have been just 40 seven+ week winning streaks, or approximately 1 every 2.5 years, with the last one (9 weeks) ending on 29 December 2023. The next obvious question surrounds how long the current winning streak may last. Roughly 80% of past seven-week winning streaks have failed to extend to 10 weeks, with only a handful stretching beyond that. Historical returns for the S&P 500 have also been generally strong following previous seven-week winning streaks, with higher-than-historical-average rates/occurrences as follows: next month 1.5% higher 73% of the time; next quarter 4.1% higher 83% of the time, and next year 13.0% higher 83% of the time. That would give us an S&P 500 of 8,371 in mid-May 2027. By the way, the longest S&P 500 winning streak was 14 weeks, set back in both 1927 and 1957. For next week we get the FOMC minutes on Wednesday as new Fed Chair Kevin Warsh begins his first full week of work. And also after Wednesdays close we get the Nvidia earnings report, the last of the Mag 7. For TSP TIPS the C fund has now reached the top of the Performance Ranking leaderboard, narrowly knocking the I fund into the runner up position, with the S fund remaining in third. For Composite Scores, the C fund remains at 100 while the I and S funds fell to 95 as their prices dipped below their 20 day Moving Averages. As such, we are recommending a new investment mix for the Aggressive and Conservative models. The Moderate model made a reallocation to the C fund last week, so we recommend holding off on your second reallocation until the end of the month. The plan is to send out our TSP TIPS second investment mix after the market close on Wednesday 27 May, for reallocation before noon on Thursday 28 May. This will allow us to fine-tune all three models second investment mix for May with a day to spare.