Good evening, TSPwire Tactical Investor!

After shrugging off the ugliest employment report in four years, US Large Cap Stocks (C Fund) went up almost 5% in last week! It might seem unthinkable that stocks could rise on a day when the Labor Department reported that non-farm payrolls declined for the first time since 2003, seeming to rubber-stamp recession worries. But there were enough silver linings in the jobs report to reassure investors. Ugly payroll reports have been revised higher lately, leading some traders to second-guess any bad news. The unemployment rate fell, and other economic indicators, including surprisingly strong manufacturing report from the Institute for Supply Management, were solid enough to keep recession worries at bay.

Weaker job growth might make it more likely that the Federal Reserve will keep cutting interest rates, never an unwelcome development for stock traders. Some market pros suggested the panic had gotten out of hand and the worst of the selling was nearly over. Now, some money managers are starting to look ahead to a rebound in the second half of the year.

We believe that even though Feds might continue cutting interest rates gradually will not see another emergency rate cuts any time soon. Because of that we are moving out money from our F Fund back into the stock market (i.e. C Fund). Our new allocation: 50% in I Fund and 50% in C Fund.