This is your TSP Watchdog UPDATE for the week ended November 8, 2019.

“Round and round she goes, where she stops nobody knows.”

Pretty much sums up the market these days – with the S&P 500 gaining 1.39% (extending its winning streak to 5 weeks) and the NASDAQ gaining 1.06% (extending its winning streak to 6 weeks).  The Dow gained 1.22% (extending its winning streak to “only” 3 weeks).  All market data from Yahoo! Finance.

Behind the continuing gains on Wall Street are solid Q3 earnings reports and expectations that a Phase I trade deal with China is close.

This earnings season appears to be sending the message that the economic slowdown is behind us, if it ever existed at all.  Growth has slowed, but the economy is still growing at a moderate pace (still on par, or better, than during most of the Obama administration).  Growth has slowed – not the economy itself.

A trade deal with China is a confusing story to follow.  Conflicting comments from negotiators on both sides make it difficult to know what is really happening.  The picture changed some during the week, with assertions and denials undercutting the feeling that a deal was pretty much complete and agriculture data conflicting with expectations that China had already begun major soy bean purchases.  It remains to be seen whether a deal will really move the needle much at all.

(you can bet your bottom dollar that whatever agreement emerges will be touted as the best deal ever made, but look under the bun to see for yourself if there is any meat there, or if this is a “where’s the beef” agreement.

In our TSP Watchdog database, as you can probably guess, there were no trend changes during the week.  New all-time highs in all three major stock indexes push all the stock funds in the TSP higher – further above their trend lines.  The C fund, S fund and I fund are further above their trend lines than they have been in many months.

The F fund has actually been sliding in recent weeks.  Interest rates have been climbing, and this is weighing on bond prices (the F fund).  We have been on the sidelines for several months in relation to the F fund, and we will stay there, at least for now, as bonds are slipping (which pushes the F fund even further below its trend line).

We are watching the markets closely – there just has been very little to cause us to take action.  The trends have been largely unchanged for several months – and we have been invested in the C, S and I funds throughout.  If you have been holding these funds, you should see gains in your TSP account.

The trends tell us to continue on this path – and we will stay the course as long as the trends remain positive.

Of course, if you have any questions, please reply to this email and send them over.  We are here to help any way we can.

Scot B.