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Updated: JP Morgan Guide to the Markets for 1Q 2018

Posted by WrapManager's Investment Policy Committee

February 15, 2018

Updated: JP Morgan Guide to the Markets for 1Q 2018

Updated with 4Q 2017 Data

JP Morgan's updated Guide to the Markets for the first quarter of 2018 now includes financial data for 4Q 2017, including:

S&P500 Earnings Per Share (EPS)
Corporate earnings: capex vs. payouts
Cash flow and corporate debt for S&P 500 companies

This 71-page guide is full of charts that provide key insights into the labor market, housing, corporate debt and other key financial topics.

Download J.P. Morgan's updated Guide to Markets for 1Q 2018, or continue reading to learn more about the information it contains.

The Cost of Having a Child

February 14, 2018

There are numerous planning considerations involved when starting or expanding your family -- lifestyle, career, living space…the list goes on. Arguably the financial component is near the top of the list. Most people planning for family know that it will impact their finances, but to what extent? Using data compiled by the U.S. Department of Agriculture (USDA), the estimated cost for a married couple on the West Coast (with a combined income greater than $107,000) to raise two children would be a somewhat startling $775,620. Dig-in a little further, and the data suggests that around $166,000 would go towards education/child care. The family could also spend upwards of $110,000 on food alone. The data and estimates are based on a study performed by the Department of Agriculture titled “Expenditures on Children by Families, 2015”. The USDA created a fascinating and free calculator that anyone can use to run the numbers for starting a family. You simply tell the calculator how many children you have or want, your income level, whether you’re single or married, and what region of the country you live in. And that’s it! The calculator does the rest. [+] Read More

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

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

Money Manager Commentary: Why Was the Market So Volatile This Week?

February 8, 2018

Money Managers have had plenty to say about the market volatility that started last week. That’s why this week we’re doing something different. The post below is a compilation of five different commentaries. As usual, you can read the excerpt below, or click the link to download the full version of each of the individual commentaries. Keep reading to see what the following money managers say about this week’s volatility. Lord Abbett and Company Cambiar Investors Nuveen Asset Management Federated Investors ClearBridge Investments [+] Read More

Financial Goals: The Importance of Salary Negotiations

February 7, 2018

Most readers have been down this road before. Work hard in your job and in your career, and you get to a point where it’s time to ask for a promotion or a raise (or both!). As workers and professionals, it is not outlandish to think of ourselves as assets just like stocks or real estate – we have a market value, and often times that market value increases over time because the company makes a profit or the property is in high demand. In that sense, salary negotiations are not all that different from stock investing – investors often pay a premium to own a good company, just as a company should pay a premium to have a valuable team member on staff. Negotiating a higher salary means asking for a fair value where the value is due. But there is another, crucial factor that gives importance to salary negotiations: Making more money can mean more aggressively pursuing our long-term financial and retirement goals. [+] Read More

BlackRock Commentary: An Upside U.S. Growth Surprise

January 31, 2018

A tax overhaul in the U.S. could spill over to benefit the global economy. The U.S. tax overhaul and higher expected federal spending points to faster growth just as the expansion enters its ninth year. This represents a of sea change from U.S. fiscal policy’s long drag on growth and bodes well for the synchronized, global expansion. Read an excerpt of BlackRock's evaluation below, or download the complete commentary now. [+] Read More

How to Financially Plan for Natural Disasters and Other Unexpected Events

January 31, 2018

2017 was a historic year for multiple reasons, but perhaps none more impactful than in the context of natural disasters here in the United States. 2017 was a record year when it came to cumulative damages from “weather events,” with the total cost reaching $306.2 billion. This number shattered the previous record set in 2005 of $214.8 billion, which was disproportionately caused by Hurricane Katrina in New Orleans. When people think about 2017 in terms of natural disasters, Hurricane Harvey, Irma, Maria, and the California wildfires probably come immediately to mind. But there were also hail storms in Colorado and Minnesota, drought and fire in the Plains states, three sizable tornado outbreaks, and flooding in California last February. The National Oceanic and Atmospheric Administration created this insightful graphic detailing the major weather events, many of which may still come as a surprise. In all, there were 16 weather events whose damages exceeded $1 billion. [+] Read More

Nuveen Evaluates Rising Risks, Recommends Pro-Growth Bias

January 25, 2018

We are not yet seeing warning signs that would signal a correction... Over the past 18 months, investor sentiment appears to have come full circle. In mid-2016, deflation fears reigned and investors seemed eager to embrace negative news. Since that time, however, optimism toward economic growth, earnings growth and stock market prospects have become the main investment themes. The most recent example of this trend is the incredibly positive reaction to last month’s tax bill, which has caused investors and analysts to forecast increasingly higher earnings results even as valuations are growing less attractive. Such an environment causes us to take pause and examine the risks. Earnings expectations are quite high. While we think they can still be met, the higher expectations rise, the harder it will be for results to beat estimates. Read a summary of insights from Nuveen Asset Management's Senior Portfolio Manager and Chief Equity Strategist Bob Doll below, or download the entire investment commentary as a PDF. [+] Read More

Why High Income Earners Can Still Benefit from a Budget

January 23, 2018

A high-income earner can benefit from a having a budget much like a professional athlete can benefit from having a personal trainer – even though the extra help and attention may not be completely necessary, it can serve to make a good situation even better. Much better. Consider that, simply put, two goals of closely maintaining a budget are to: Minimize waste Maximize efficiency Isn’t that what everyone wants when it comes to your hard-earned dollars? Let’s start with minimizing waste. One of the first steps in creating a budget is to itemize each and every monthly expense you incur. Mortgage payments, insurance, cable and internet, phones, memberships, subscriptions, utilities, food, entertainment, and so on. When was the last time you sat down and closely scrutinized all of these expenses? Doing so could very well reveal fat that needs trimming. [+] Read More

Navigating Your Finances Through Divorce

January 22, 2018

There’s really no way to sugarcoat it – though relationships are often filled with love and beauty, they can also be complicated and sometimes difficult to sustain over time. In recent years, January has earned the dubious honor of being nicknamed “Divorce Month,” as analysis of divorce filings between 2008 and 2011 revealed a spike in divorces in January through March.1 Life changes like divorce or separation almost always call for major financial adjustments, which can often feel like insult to injury. But it doesn’t have to be that way – working with your financial advisor can help you work through the process professionally, and can also prevent emotion from sifting into financial decision-making. That’s key to eliminating some of the financial consequences of divorce. [+] Read More