Monthly Archives: June 2015

Hello Folks

I continue to be 100% S-Fund, with no changes expected, even in light of the cathartic Greek crisis.   On Monday June 29, Greek banks will remain closed, and “capital controls put into place”, in an apparent last-ditch effort by Greek government to prevent citizens from draining their bank accounts and to prevent a likely bank run.   I reported in previous posts that a payment to the IMF is due on June 30.   There is no signal that Greece can, or even really wants, to make this payment.  Failure to making this payment is technically a default on the IMF loan(s).

By all indications, Greece will soon be exiting the Eurozone and will probably never be able to borrow another penny from anybody, akin to a FICA score of zero.   Which, probably is best for everyone, except the Greeks.

Dow Futures are down 200 points during the evening of Sunday June 28.    Monday June 29 will be a volatile day in the stock markets, but my question is “Does Greece Matter?”   I discussed this in my prior May 7 post, please take a look, and reflect on whether or not Greece can really cause any damage to world markets (the opinions are wide-ranging).

I continue to be 100% S-Fund until further advised.   Fasten the seat belts, this week ahead will be somewhat bumpy.

Talk to you soon….

– Bill Pritchard

Hello Everyone

It appears that as of Sunday June 14, Greek Debt talks have broken down (again), with Greece pushing-back on creditor requests that Greek pensions be cut.  Another IMF payment is due on June 30, and many feel that Greece will not be able to pay it.   SP 500 overnight futures are trading lower, reflecting the break-down in debt talks.

In other news, the Federal Open Market Committee (FOMC) will meet this week and upon finishing their meeting, will have a press conference at 2:30PM Eastern Time on Wednesday June 17.  During this meeting, my opinion is that it is unlikely we see any acceleration of the pending interest rate hikes (my opinion is not until 2016).  I feel this meeting will be a “non-event” and not much different from the last meeting.

Other news pending this week, on June 16, is the “Housing Starts Report”, this report includes building permits, housing starts and housing completions data.  As we digest this report, which will likely be positive, and reflect an improvement over the last period, one must consider that home buyers who were “on the fence” between buying and renting, in light of potential interest rate hikes, are now in the “buyer” category.  So recent positive Housing Starts reports, must be viewed thru this lens.  In addition, May and June are typically the months of elevated real estate activity, as people get moved into position, and into a house, prior to the end of summer.   For those who have PCS’ed, this is a multi-month process, packing out, selling your house, obtaining a new home, obtaining financing (“Quick close mortgage” is still approx 20 days), etc etc.   So this does not happen overnight.  As I am learning via my own PCS move, May and June are very active with large numbers of quick buyers waiting in the shadows to pounce on the nice homes with good schools.  In light of the above events, we may have a turbulent market week, so keep those seat-belts fastened.

That is all I have for now….I remain 100% S-Fund, any changes I make to my TSP Allocation will be posted on this site.

Thank you for reading and everybody have a great week…

– Bill Pritchard

Hello Everyone !

I apologize for reduced activity, I am in the middle of a PCS transfer, from overseas/foreign location to domestic USA, so I am juggling numerous things and have been off the grid to some extent.

I remain 100% S-Fund.  While I-Fund indeed flashed some signs of life in April and early May, it then deteriorated and went south (performance wise), compared to the other funds.   The S-Fund was top performer for May returns.   The I-Fund was a negative performer and indeed carries additional risks for those who are in the I-Fund.  So again, I am maintaining course and remain 100% S-Fund.

On Friday June 5, the Labor Department released its most recent “jobs report”, which reflected an unemployment rate of 5.5%, which is a slight worsening of the prior rate, of 5.4%.   Whether the FOMC will raise rates or not in 2015, is still a hot debate, however I just don’t see it happening until sometime 2016.  My opinion.

For in-depth discussion regarding my opinion on rate hikes, go to my March 12 Post at this link:  http://www.thefedtrader.com/march-12-update-interest-ratespart-2/

Remember we are looking at BOTH Jobs/Employment data AND the PCE Inflation data.  If the FOMC’s publicly advertised parameters (to include congressional testimony) are to be adhered to, then BOTH of the above need to be fulfilled prior to rate hikes.

That is all I have now…tomorrow Sunday my day will be filled with more real estate and home shopping activity, I will be off the grid for another week or two, but WILL be monitoring things market-wise.   ANY changes to my TSP will be posted here.

Thanks for being a subscriber and please continue to share this site with your friends and colleagues.

– Bill Pritchard