Any way you look at it, when the S&P 500 closes the week at a new record high its a great week, and thats exactly what the S&P 500 did when it closed at 7,757 on Friday. Monday kicked off the first trading day in August, and the S&P 500 built on the previous weeks gains. The Mag 7 tech stocks were the driving forces behind the markets advance as Meta Platforms (META) surged 6%, Nvidia (NVDA) popped almost 3%, while Alphabet (GOOGL) and Microsoft (MSFT) climbed close to 5% each. To top it off, Amazon (AMZN) also rose more than 4%, hitting a record $3 trillion market capitalization and posting a new closing high. All told, the S&P 500 had a daily gain of greater than 1% and closed above 7,600 for its highest close since its record high on 2 June. On Tuesday stocks had another banner day with the S&P 500 back-to-back daily gains of over 1%, and the Dow Jones Industrial Average scaling to fresh record highs, thanks to strong earnings and another decline in oil prices driven by hope that the Strait of Hormuz could be reopened. On Wednesday the S&P 500 pulled back slightly, snapping a four-day win streak which included three daily gains of over 1% (always a good sign). On Thursday the markets continued to regain their breath, awaiting the payrolls and employment report before Fridays open. At 0830 Julys non-farm payrolls report showed a drop of 23,000 jobs, well below the forecast gain of 83,000, while the unemployment rate fell to 4.1%, below the forecast of 4.2% as the labor force participation rate fell to its lowest level in more than five years. However, traders interpreted those numbers as meaning the Federal Reserve wont need to raise interest rates soon and can leave monetary policy on hold for now. As such, the S&P 500 gapped up at the open and maintained that level throughout the session, closing at a new record high of 7,757. From a technical perspective, this is exactly what we were looking for, a bullish breakout of that 13-week S&P 500 range bound channel between a high of 7,620 on 2 June and low of 7,237 on 9 June, confirmed by a bullish breakout of the Moving Average Convergence Divergence (MACD) indicator. For next week the second half will be busy as we get the inflation numbers on Wednesday and Thursday followed by the UMICH consumer sentiment number on Friday. For TSP TIPS we did go back to a 100% equity allocation this week, and for good measure the S and C funds closed at new record highs on Friday. As such we recommend no changes to our current investment mix allocations.
Any way you look at it, when the S&P 500 closes the week at a new record high its a great week, and thats exactly what the S&P 500 did when it closed at 7,757 on Friday. Monday kicked off the first trading day in August, and the S&P 500 built on the previous weeks gains. The Mag 7 tech stocks were the driving forces behind the markets advance as Meta Platforms (META) surged 6%, Nvidia (NVDA) popped almost 3%, while Alphabet (GOOGL) and Microsoft (MSFT) climbed close to 5% each. To top it off, Amazon (AMZN) also rose more than 4%, hitting a record $3 trillion market capitalization and posting a new closing high. All told, the S&P 500 had a daily gain of greater than 1% and closed above 7,600 for its highest close since its record high on 2 June. On Tuesday stocks had another banner day with the S&P 500 back-to-back daily gains of over 1%, and the Dow Jones Industrial Average scaling to fresh record highs, thanks to strong earnings and another decline in oil prices driven by hope that the Strait of Hormuz could be reopened. On Wednesday the S&P 500 pulled back slightly, snapping a four-day win streak which included three daily gains of over 1% (always a good sign). On Thursday the markets continued to regain their breath, awaiting the payrolls and employment report before Fridays open. At 0830 Julys non-farm payrolls report showed a drop of 23,000 jobs, well below the forecast gain of 83,000, while the unemployment rate fell to 4.1%, below the forecast of 4.2% as the labor force participation rate fell to its lowest level in more than five years. However, traders interpreted those numbers as meaning the Federal Reserve wont need to raise interest rates soon and can leave monetary policy on hold for now. As such, the S&P 500 gapped up at the open and maintained that level throughout the session, closing at a new record high of 7,757. From a technical perspective, this is exactly what we were looking for, a bullish breakout of that 13-week S&P 500 range bound channel between a high of 7,620 on 2 June and low of 7,237 on 9 June, confirmed by a bullish breakout of the Moving Average Convergence Divergence (MACD) indicator. For next week the second half will be busy as we get the inflation numbers on Wednesday and Thursday followed by the UMICH consumer sentiment number on Friday. For TSP TIPS we did go back to a 100% equity allocation this week, and for good measure the S and C funds closed at new record highs on Friday. As such we recommend no changes to our current investment mix allocations.