Economic data added to the gains helped to push the S&P 500 to new highs. The report showed positive growth in the U.S. GDP. Consumer spending was a driving factor as it recorded its strongest pace of growth since 2017.Notebly we are not seeing the good news is bad news sell-offs in front of the FOMC meeting. This may be because the market is already counting on a 0.25% rate cut and trusts the Fed is already pressured enough not carry it out.
Speaking of, the Fed will be center stage next week. The rate cut is already expected but the investors will be listening closely as to what the Fed plans on next. More rate cuts? There will be more earnings reports but they will mostly be the small cap names and Apple.
Small caps outperformed this week with a gain of 2.07%. Bonds were just below even and the I-fund lagged with a loss of 0.19%.
Here are the weekly, monthly, and annual TSP fund returns for the week ending July 26th:
Rising support and the 20-day EMA was a good starting point into the week for SPY (S&P 500 / C-fund). The index hit its July peak and reversed Thursday. But earnings and the GDP report pushed the index to new highs Friday. The C-fund was up 1.66% for the week.
The Dow Completion Index (S-fund) outperformed this week as the index jumped higher Wednesday above its 2019 highs. The index fell back below Thursday but was back to new highs Friday. There is resistance from a mid-May peak and the recent peaks but a number of small cap names will reporting earnings next week and if the good news keeps flowing this index may take off. The S-fund was up 2.07% for the week.
EFA (EAFE Index /I-fund) gapped up Tuesday out of it descending trading channel but could not carry higher. The index fell to close the new gap but ended the week above the resistance of the trading channel. There is open gaps above and below seems more likely sooner if technical conditions uphold. The I-fund lagged for the week. with a loss of 0.19% for the week.
AGG (Bonds / F-fund) rose early in the week to complete the filling of the open gap but fell from there to give up the gains. The action is currently mimicking what we saw from this index in April to late May. After jumping between its 20-day EMA a few day the index traded higher before coming back to test its 20-day EMA again. So far the pattern has held but in May the index rallied for the next two months. Investors take on the FOMC meeting will affect the future of bonds. The Fed is looking to fix the inverted yield curve which would mean a downturn for this index if successful. Although bonds are a safety net during uncertain times and inventors are all over the place with how they think the Fed will act next. We will see if the FOMC meeting will bring clarity.
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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