WrapManager's Wealth Management Blog
When life changes, we can help you thoughtfully respond.

How Inflation and Interest Rate Fears Could Have Been to Blame for Recent Market Volatility

Posted by Doug Hutchinson | CFA®, Director of Research and Trading

February 8, 2018

Inflation worries caused by a single economic report have led to increasing concern that the economy may be overheated. A rapidly expanding economy could lead the Fed to increase interest rates at a faster than expected pace.

The January Unemployment Report from the Bureau of Labor Statistics showed an increase in average hourly wages of 9 cents, pushing the annual increase to 2.9% from 2.6%. A couple points of caution on this report are needed. First, it is possible that some or even most of the wage increase is due to 18 states raising their minimum wage as of January 1st. If that is the case, this will likely be a one-time bump in average wages rather than a sustained trend higher. Second, there could be a temporary weather impact on this report (which won’t repeat once the weather gets warmer). Some workers were not able to work full-time because they couldn’t make it to work on certain bad weather days. If these workers were lower paid workers, that would push up the aggregate average hourly wage for January because the lower paid workers worked fewer hours.

We’ll need to wait for the February, March, and April reports to see if the increase in average hourly wages is a trend or if the January report is just a blip on the radar.

[+] Read More

market perspective stock market performance Economic Indicators Market Volatility

Have you heard of the “January Effect”?

December 27, 2017
You many have heard people speak about the "January Effect," but what does it actually mean? In short, the January Effect is a concept ... [+] Read More

Chasing Heat? You May Get Burned.

June 7, 2017
The Information Technology sector has been on a roll so far in 2017. The returns for the sector year-to-date are nothing short of ... [+] Read More

When the Stock Market Gets Volatile, Smart Investors Do This

May 10, 2017
There’s a popular saying that people often use to characterize or describe human behavior: “we are our own worst enemies.” This phrase ... [+] Read More

The Contrarian Nature of Bearish Forecasts

October 19, 2016
There seems this growing feeling that the market is on shaky ground. As an investor, you may feel it too: the presidential election is ... [+] Read More

Does Your Advisor Avoid Talking about Performance?

September 28, 2016
Monitoring the performance of an investment portfolio is a tricky task. On one hand, many investors would benefit from not becoming overly ... [+] Read More

The ‘Bear Market’ Chatter is Rising: What Should You Do?

September 8, 2016
If you’re starting to get the feeling that the mutterings of a next bear market are growing, it’s because in many senses they are. A recent ... [+] Read More

As A New President Rises, Will the Markets Follow?

August 16, 2016
The U.S. presidential election has capitalized the news media, social media, and pop culture for nearly a year now, and we still have ... [+] Read More

Republican or Democrat: Which Political Party is Better for the Economy?

March 9, 2016
The recent market volatility has shifted focus away from the upcoming presidential election (a little), but there’s still not a day that ... [+] Read More

What's Ahead for Investors in 2016?

December 30, 2015
When you think about it, investing is a lot like life: some years are great, some less so, but at the end of the day it’s of utmost ... [+] Read More