The S&P 500 broke a three-week winning streak as it closed at 7,674, down 1.43% on the week. The driving force behind the markets this week was bonds and their increasing yields. On Monday the rise in oil prices stoked inflation fears, driving longer-dated Treasury yields higher as the 30-year Treasury bond yield reached a peak not seen since June 2007. As such the S&P 500 lost about 0.5%. On Tuesday, bond yields were pressured by a run in sovereign bond yields to multidecade highs amid concerns of persistent inflation and elevated oil prices. Japans 10-year bond yield reached its highest level in three decades, Germanys 30-year bond yield hit its highest since 2011, and the French 30-year government bond yield reached its highest point since 2008. A pullback in semiconductor stocks also weighed on the broader market with the S&P 500 tacking on another loss of 0.7%. On Wednesday the S&P 500 snapped a three-session losing streak as yields on longer-dated U.S. Treasurys pulled back from multi-year highs after the government unveiled a plan to ease pressure by doubling repurchases of 10-, 20- and 30-year debt in the next few months. It was also a historic day for Moderna (MRNA) as it gained 176%, the largest gain for a S&P 500 stock in 25 years, as MRNA and Merck (MRK) reported very strong late-stage results for their personalized mRNA cancer treatment. While this was great news, it was somewhat offset with the Treasury announcement that the national debt total had pushed past the $40 trillion mark, again pressuring bond markets. That brought Thursdays losses as long-dated Treasury yields resumed their march higher, after efforts by the government to stem the recent bond market rout failed to ease investor fears about inflation. That said, a pullback in Walmart (WMT) shares also hit the broader market, as it dropped more than 6% after its U.S. comparable sales missed analyst expectations. On Friday investors tried to find their footing following a sell-off driven by rising Treasury yields, which led to a resurgence in gold, precious metals and crypto shares, with Bitcoin (BTCUSD) up over 22% this week. From a technical perspective we should remember that just last Thursday, 13 August, all major indices broke out and scored new record highs. This week was basically a breather and hopefully that bullishness will return on Monday. For next week well get core monthly inflation numbers and Nvidia (NVDA) earnings on Wednesday, followed Fed Chair Warshs speech on Friday. For TSP TIPS all funds continue to have maxed out Composite Scores of 100, with the S fund at the top of the Performance Ranking leaderboard. As such we recommend no changes to our current investment mix, but stand by for one, if warranted, next weekend for our second August reallocation. Finally, for our Mutual Fund Window (MFW) TIPS subscribers please check your inboxes for a new exchange into the ProFunds Bitcoin fund (BTCFX).
The S&P 500 broke a three-week winning streak as it closed at 7,674, down 1.43% on the week. The driving force behind the markets this week was bonds and their increasing yields. On Monday the rise in oil prices stoked inflation fears, driving longer-dated Treasury yields higher as the 30-year Treasury bond yield reached a peak not seen since June 2007. As such the S&P 500 lost about 0.5%. On Tuesday, bond yields were pressured by a run in sovereign bond yields to multidecade highs amid concerns of persistent inflation and elevated oil prices. Japans 10-year bond yield reached its highest level in three decades, Germanys 30-year bond yield hit its highest since 2011, and the French 30-year government bond yield reached its highest point since 2008. A pullback in semiconductor stocks also weighed on the broader market with the S&P 500 tacking on another loss of 0.7%. On Wednesday the S&P 500 snapped a three-session losing streak as yields on longer-dated U.S. Treasurys pulled back from multi-year highs after the government unveiled a plan to ease pressure by doubling repurchases of 10-, 20- and 30-year debt in the next few months. It was also a historic day for Moderna (MRNA) as it gained 176%, the largest gain for a S&P 500 stock in 25 years, as MRNA and Merck (MRK) reported very strong late-stage results for their personalized mRNA cancer treatment. While this was great news, it was somewhat offset with the Treasury announcement that the national debt total had pushed past the $40 trillion mark, again pressuring bond markets. That brought Thursdays losses as long-dated Treasury yields resumed their march higher, after efforts by the government to stem the recent bond market rout failed to ease investor fears about inflation. That said, a pullback in Walmart (WMT) shares also hit the broader market, as it dropped more than 6% after its U.S. comparable sales missed analyst expectations. On Friday investors tried to find their footing following a sell-off driven by rising Treasury yields, which led to a resurgence in gold, precious metals and crypto shares, with Bitcoin (BTCUSD) up over 22% this week. From a technical perspective we should remember that just last Thursday, 13 August, all major indices broke out and scored new record highs. This week was basically a breather and hopefully that bullishness will return on Monday. For next week well get core monthly inflation numbers and Nvidia (NVDA) earnings on Wednesday, followed Fed Chair Warshs speech on Friday. For TSP TIPS all funds continue to have maxed out Composite Scores of 100, with the S fund at the top of the Performance Ranking leaderboard. As such we recommend no changes to our current investment mix, but stand by for one, if warranted, next weekend for our second August reallocation. Finally, for our Mutual Fund Window (MFW) TIPS subscribers please check your inboxes for a new exchange into the ProFunds Bitcoin fund (BTCFX).