The S&P 500 closed at 7,411 on Friday, down 0.61% for the week and marking its second consecutive down week. This week the war with Iran continued with the steady drumbeat of nighttime strikes, economic news was light, but earnings seasoning was still just getting started. On Monday the S&P 500 was slightly down, but on Tuesday the S&P 500 had a nice gain and closed back above the 7,500 level. Then, on Wednesday Alphabet (GOOGL) reported earnings before the opening bell, stating that its 2026 AI capital expenditures will be as high as $205 billion, leading to a daily drop of 1.7%. After Wednesdays closing bell, Tesla (TSLA) reported a big earnings miss for the second quarter, combined with operating expenses that rose faster than revenue. As such, this put pressure on the markets as the S&P 500 gapped down at Thursdays open. Specifically, Alphabets shares slid 7.1% for its worst one-day performance since 7 May 2025, while also losing $293.8 billion in market cap, the companys largest one-day loss on record, and the sixth-worst one-day market-cap loss ever for a U.S. company. And lets not forget about those TSLA misses, which lost 14.5% by Thursdays close. In sympathy, the S&P 500 had a daily loss of greater than 1% and oil climbed above $100/bbl for the first time in two months. On Friday the markets seemed to need a breather and closed up slightly, near that flatline level. From a technical perspective we still remain in that 12-week S&P 500 range bound market between a high of 7,620 on 2 June and low of 7,237 on 9 June. But we are starting to see some weakness in our short-term indicators, as prices have decreased below their 20 and 50 day Moving Averages (MA). For next week it will be busy as more Mag 7 companies report earnings and the Fed announces its interest rate decision. For TSP TIPS weve also seen some weakness in our short-term indicators, along with some reversals. Specifically, this week all three equity funds (C/S/I) had a closing price below the low of their previous two weeks. As such, instead of waiting until the end of July to make allocation changes, we are now recommending the following new investment mixes which increases the cash allocation in all three models as follows. These should be executed on Monday and if conditions worsen, WE WILL UTILIZE A THIRD MONTHLY INVESTMENT MIX AT THE END OF THE WEEK, FURTHER INCREASING THE CASH ALLOCATION.
The S&P 500 closed at 7,411 on Friday, down 0.61% for the week and marking its second consecutive down week. This week the war with Iran continued with the steady drumbeat of nighttime strikes, economic news was light, but earnings seasoning was still just getting started. On Monday the S&P 500 was slightly down, but on Tuesday the S&P 500 had a nice gain and closed back above the 7,500 level. Then, on Wednesday Alphabet (GOOGL) reported earnings before the opening bell, stating that its 2026 AI capital expenditures will be as high as $205 billion, leading to a daily drop of 1.7%. After Wednesdays closing bell, Tesla (TSLA) reported a big earnings miss for the second quarter, combined with operating expenses that rose faster than revenue. As such, this put pressure on the markets as the S&P 500 gapped down at Thursdays open. Specifically, Alphabets shares slid 7.1% for its worst one-day performance since 7 May 2025, while also losing $293.8 billion in market cap, the companys largest one-day loss on record, and the sixth-worst one-day market-cap loss ever for a U.S. company. And lets not forget about those TSLA misses, which lost 14.5% by Thursdays close. In sympathy, the S&P 500 had a daily loss of greater than 1% and oil climbed above $100/bbl for the first time in two months. On Friday the markets seemed to need a breather and closed up slightly, near that flatline level. From a technical perspective we still remain in that 12-week S&P 500 range bound market between a high of 7,620 on 2 June and low of 7,237 on 9 June. But we are starting to see some weakness in our short-term indicators, as prices have decreased below their 20 and 50 day Moving Averages (MA). For next week it will be busy as more Mag 7 companies report earnings and the Fed announces its interest rate decision. For TSP TIPS weve also seen some weakness in our short-term indicators, along with some reversals. Specifically, this week all three equity funds (C/S/I) had a closing price below the low of their previous two weeks. As such, instead of waiting until the end of July to make allocation changes, we are now recommending the following new investment mixes which increases the cash allocation in all three models as follows. These should be executed on Monday and if conditions worsen, WE WILL UTILIZE A THIRD MONTHLY INVESTMENT MIX AT THE END OF THE WEEK, FURTHER INCREASING THE CASH ALLOCATION.