Stocks were down for the week due to the fear of a possible increase in interest rates next month. The Federal Reserve has had interest rates close to zero since the financial crisis in 2008 and have been looking for an opportunity to raise them again since. Investors have been closely monitoring the Fed’s decision on raising them and it has been quite the catalyst for the market the past year. If the Fed raises rates at the wrong time there could be irreversible effects in the economy which has been the case in other countries in similar situations. Fed member Janet Yellen has publically announced that December is a likely time for rates to go up so this will be a hot topic until a decision is made resulting in emotional reactions by investors who prefer rates to stay as low as possible
The tragic attacks in Paris last night may also have an effect on Monday’s open. Distress is increasing in Europe as terrorism and talk of war is on the mind many, another emotional catalyst.
The S-fund lagged this week down nearly 4%, followed by the C fund down 3.56%. Wednesday was Veteran’s Day so the TSP was closed but the market remained open.
Here are the weekly, monthly, and annual TSP fund returns for the week ending November 13th:
The SPY (S&P 500 / C-fund) continued to drop after reaching resistance from the highs of July. A gap from October was filled on Thursday and selling continued until SPY reached it’s 200-day EMA which at this point is its only line of defense as support.
Conversely the Dow Completion Index (S-fund) was held up by its 200-day EMA the week before. It fell below its 20 and 50-day EMA and looks to be headed toward filling a small gap left behind from early October. The S-fund was down 3.94% for the week.
EFA (EAFE Index / I-fund) is also headed toward an open gap from early October. EFA is now under pressure from declining resistance of the August highs passing through the last test of its 200-day EMA. The I-fund was down 1.72% this week, the better of the TSP stock funds.
AGG (Bonds / F-fund) lead this week with modest gains as it filled its most recent open gap putting it back above its 200-day EMA. There is another open gap to be filled above so a turn around in the possibly over sold bonds would not be surprising. The F-fund was up 0.2% for the week.
Good luck and thanks for reading. We will be back here next week with another TSP Wrap Up. You can read our daily market commentary at the Market Comments page. If you need more help deciding what to do with your account, perhaps one of our Premium Services can help.
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