Stocks continued their impressive start to 2018 this week. Traders are optimistic about economic growth so naturally we saw a rise in bank stocks after the first round of earnings reports were released on Friday. The S&P 500 fell 0.1% Wednesday to end its longest winning streak to start a year in more than half a century. The index got right back into character the last two days of the week to rally to new highs. The S&P 500 has produced gains 8 out of the 9 trading days this year.
Investors are rooting for economic growth to support corporate earnings growth but at a slow enough pace to keep Federal Reserve from rising interest rates too quickly. Earnings reports will continue to come in next week and traders have higher expectations for them at this point.
Bonds were down this week after Chinese officials recommended reducing or stopping purchases of U.S. Treasury debt.
Here are the weekly, monthly, and annual TSP fund returns for the week ending January 12th:
The SPY (S&P 500 / C-fund) continued last week’s pace of growth this week using resistance from 2017 as support on Wednesday. The index continued from the trend line to rise Thursday and Friday to produce new highs. The index closed just off the highs of the week. The C-fund was up 1.61% for the week.
The Wilshire 4500 Completion Index (S-fund) spent the majority of the week testing the overhead resistance until breaking above it Thursday and continuing up from there Friday. The S-fund was up 1.85% for the week to outperform the other TSP funds.
$IEE (EAFE Index / I-fund) never hinted at an attempt to fill the open gaps from the previous week. Rather, the index took a similar route as U.S. stocks and finished with a decent rally Friday to close above long-term rising resistance. The I-fund was up 1.76% for the week.
AGG (Bonds / F-fund) fell this week with strength in stocks and the reports of Chinese officials plans to stay out of U.S. Treasury debt. The index opened at its 200-day EMA Wednesday but was able to recover the early losses. A gap was opened at Tuesday’s open that is still open and just above where the index closed Friday. The F-fund lagged the TSP funds dropping 0.18% for the week, the only loss for the TSP funds.
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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