The herky-jerky GPS route we took on Wall Street in 2015 has investors wondering just what's next to throw us off course.
One minute in late August, we're grimacing as the Dow Jones industrial average drops 588 points in one day to trade well below 16,000. Seemingly the next minute, by early November, investors end up smiling and feeling like they can buy groceries again -- and maybe even a new car -- as the Dow trades much closer to 18,000.
What's next for our 401(k) plans and college savings plans? Here are three areas to watch:
n No shock here, the Fed
Never miss a local story.
The question here, really, isn't when or whether the Federal Reserve's policy committee will nudge up interest rates. The next meeting of the Federal Reserve Open Market Committee is Dec. 15-16.
Some say the odds are 50-50 at this point that the Fed will move in December with the first rate hike since the Great Recession drove us to near-zero percent short-term rates. If not in December, others expect the Fed first could raise rates in perhaps March.
Some market watchers, though, express even more worry about the bumps in the road that the Fed could create by a haphazard communication style. The Fed isn't telegraphing rate hikes as it had in the past. Many had expected a rate hike by September but economic troubles in China changed that scenario.
"Risk No. 1, top of the list, Janet Yellen and the Fed," said Dennis A. Johnson, chief investment officer for Comerica Wealth Management in Dallas.
Johnson, who spoke last week in Ann Arbor, Mich., before a group of Comerica bankers and clients, said Federal Reserve chairwoman Yellen and the Fed presidents have fueled some of the uncertainty on Wall Street by the lack of clear communication so far.
If the communication is garbled in the future, some experts warn that there could be more volatility for the stock market again.
"Who knows what the Fed is thinking? They certainly aren't communicating well with investors any more," Johnson said.
What can be reassuring, Johnson said, is that the Fed's delay in raising rates indicates that the Fed will move gradually to edge rates up from the historic lows -- and not rattle investors by driving rates up dramatically all at once.
"They can't even put their finger on the button, let alone push it," Johnson said.
Sam Stovall, chief equity strategist for S&P Capital IQ, said much remains unknown on the Fed front.
"The Fed is targeted to begin their rate-tightening program in December, but it's still a coin toss whether it will happen this year or in the first half of next year," Stovall said.
n The return of the R-word, recession.
Don't be surprised if you hear more scattered reports about a so-called "impending recession." But it's hard to argue that a U.S. recession is right around the corner when the consumer has been saving money and is not overwhelmed by debt, when housing prices are going up in many areas and when U.S. car and light truck sales hit a breakthrough record pace of 18.2 million in October. Right now, experts say U.S. auto sales post a record for the entire year in 2015.
Yet, economists warn eventually there will be another recession out there.
"This is not an up, up and away economy," Robert A. Dye, chief economist for Comerica Bank.
Dye said he would expect that auto sales are approaching a "cyclical peak" and could taper off in the future from these record levels. The manufacturing sector overall is approaching a "stall speed" and is expected to contribute to a slow-to-moderate growth story for the U.S. economy.
Even so, Dye said he'd expect moderate growth in the 2 percent to 2.5 percent range for the gross domestic product in 2016. He noted that the 1.5 percent growth in the third quarter was expected as companies grew more cautious and pulled back on existing inventories instead of adding more goods to store shelves and the like. Part of the third quarter inventory swing was due to the accumulation of crude oil inventories in the first half of this year, Dye said.
Dye said the risks of a U.S. recession are a bit higher than they were a year ago. But he puts the odds for a recession at 15 percent to 20 percent in 2016. The risks would grow, he said, if the economy in China proved to be far worse than expected and job growth in the United States weakened significantly.
Susan Tompor, the personal finance columnist for the Detroit Free Press, can be reached at stompor @freepress.com.