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Re: [TSPStrategy] C fund divergence in June

On the I fund, dollar has gotten stronger.

On Wed, Jul 3, 2024, 8:40 PM Jim Budinger via groups.io <jmbud2=gmail.com@groups.io> wrote:

FWIW - The C Fund (i.e. the S&P 500) is being dominated by the performance of the "Magnificent Seven" Big-Tech companies. Seemingly independently of interest rates, while clearly fueling the euphoria surrounding the AI revolution.

Here is an excerpt from a recent article in Fortune Magazine. https://fortune.com/2024/06/21/nvidia-microsoft-apple-meta-google-amazon-broadcom-ibm-index-wall-street/

"Looking at year-to-date data through June 18, shares of NvidiaMicrosoftApple, Meta, GoogleAmazon, and Broadcom have on average soared by 25.3%, while the remaining 493 companies have grown by just 2.7%. In June alone, the Magnificent Seven (the previously cited list, swapping in Broadcom for Tesla) are on average up 7.5%, but the rest of the index is down –0.5%, according to Howard Silverblatt, senior index analyst at S&P. On Tuesday, Nvidia, Microsoft, and Apple stock equated to half of the index's total returns, he adds."

Also see: https://www.cnbc.com/2024/07/01/how-magnificent-7-affects-sp-500-stock-market-concentration.html

However, some analysts think the stage is set for the small caps to outperform the S&P 500 when/if the mania chasing the Magnificent Seven begins to subside, or more likely the Fed finally begins cutting interest rates in September before the election.

See this assessment from the Bedrock Group for example.

https://www.bedrockgroup.com/why-the-neglected-us-small-caps-market-now-appeals/

If Sarah Oz was still around and sharing her moves with her TSP Strategy followers, I bet she'd be getting ready to go all in on S!

Maybe someone else has an idea about what's driving the I Fund other than inflation rates. See the attached map of global inflation from the International Monetary Fund. Hope this helps.


On Wed, Jul 3, 2024, 4:58 PM Aron Ruthe via groups.io <Thiasuswake=gmail.com@groups.io> wrote:

C, S, and to some extent I funds all pretty much correlate their movements. S tends to be more volatile, but something happened on May 31 that had S drop but C and I climb. Then on June 12, something happened and the I fund dropped while C continued to climb.

I think I saw that there was good news on inflation and interest rates that last Friday in May; and something similar on June 12 - and I would expect C to benefit from that news, but why not S? And what's the deal with I? What happened that was only joy for C and shade for S and I?

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