Lombardi: Stock Market Commentary & Forecasts, Financial & Economic Analysis Since 1986

Should You Buy Into the U.S. Dollar Rally?

By for Profit Confidential | September 17, 2014

U.S. Dollar: The Best of the WorstSince May, when it was near an all-time low, the U.S. dollar has rallied. Compared to other major currencies of the world, the greenback is up five percent since July, as the chart below illustrates.

The question: should investors get into this U.S. dollar rally?

Dear reader, the U.S. dollar is not moving higher because the fundamentals of the U.S. economy are getting better. It’s moving higher because other parts of the global economy are doing worse than the U.S.

The eurozone economy is so weak that the European Central Bank has lowered interest rates again, pushing the value of the euro lower. In the United Kingdom, Scotland is looking for independence. The crisis between Russia and Ukraine continues without resolution. New troubles are brewing in the Middle East. China reported yesterday it would start pumping money into its largest banks.

US Dollar Index Chart

Chart courtesy of www.StockCharts.com

Right now, with the majority of major world central banks either printing more of their paper money or bringing interest rates even lower, the U.S. is the best of the worst.

But I believe the rally in the U.S. dollar will be short-lived.

Central banks are trying to move away from the U.S. dollar as their reserve currency. At one point, trade in the global economy was dominated by the U.S. dollar. This is changing, slowly but surely.

Consider just one of many recent examples; the Chinese and Argentinian central banks will be doing an $11.0-billion currency swap operation. This will allow Argentina to increase its reserves and pay for Chinese imports in yuan—the deal was signed in July. (Source: Reuters, September 7, 2014.)

Putting this into simple words: the dollar has been thrown out the window when it comes to trade between China and Argentina.

And ask yourself this question: if you were the one running China or Russia, wouldn’t you want to get out of U.S. dollars so trade is denominated in your currency… Read More

My All-Around Favorite “Growth” Company

By for Profit Confidential

All-Around Favorite “Growth” CompanyTomorrow, Oracle Corporation (ORCL) reports its numbers for its first fiscal quarter of 2015. What the company has to say about its business conditions is material to the equity market.

Oracle is a benchmark technology stock that’s not expensively priced. The company offers dividends; its current yield is approximately 1.2%, which may not be enough for some investors looking for a large-cap, mature technology stock.

Oracle’s share price tends to experience waves of buying enthusiasm. If the company just slightly beats consensus, there will be solid buying in the stock.

But being a mature business, this company isn’t a fast grower. What it offers investors is a benchmark in enterprise information technology (IT) demand. A quick read of the company’s SEC form 10-Q can be very informative regarding enterprise customers and their spending.

Oracle’s share price has been steadily climbing back and it’s almost at its all-time record-high set during the technology bubble of 2000. It’s been a great comeback from the irrational exuberance of those days. The company’s long-term chart is featured below:

Oracle Corporation Chart

Chart courtesy of www.StockCharts.com

Dollar for dollar, however, I still prefer Microsoft Corporation (MSFT) for those investors looking for a blue chip technology stock.

The company pays more in dividends, its valuation is about the same as Oracle’s, and it has a multifaceted business strategy that includes both consumer and enterprise customers.

Furthermore, I think Microsoft is more likely to deliver better capital gains over Oracle in the near- to medium-term.

This doesn’t mean that Oracle can’t accelerate its business growth going forward. All the company has to do is get the next business cycle in enterprise and government spending right, and it could deliver higher single-digit sales growth than recently (about five percent per year).

Micros… Read More

Why I’m More Excited About the Food Sector Than Apple’s Latest Products

By for Profit Confidential

This Food Company More Deserving of Your Attention Than AppleWhile the entire world was waiting for and anticipating the next-generation “iPhone 6” from Apple Inc. (NASDAQ/AAPL) on Tuesday, General Mills, Inc. (NYSE/GIS) announced it was acquiring organic and natural food company Annies, Inc. (NYSE/BNNY).

Okay, the launch of the iPhone 6 was clearly more exciting, but so what? The launch was more hype than substance, unless you consider a new and bigger iPhone earth-shattering.

But I’m not here to talk about Apple. What I will discuss is the food sector, especially the makers of organic and natural food products, which appear to be in play, based on my stock analysis.

If you owned Annie’s before it was acquired by General Mills, congratulations on your 38% jump in stock price on the news! Go treat yourself to some fine wine and a great meal. If you didn’t get to profit from this deal, there are still some stocks in the same sector as Annie’s that have great potential.

One small-cap natural food products company that I like based on my stock analysis, and this is one that I have been covering for a few years now, is Inventure Foods, Inc. (NASDAQ/SNAK). The small company produces and markets specialty food brands, concentrating on the snack food market. Some of its product lines include nutritional and natural snacks.

Inventure Foods sells products under its own brand and other licensed brands, including the following: “Boulder Canyon Natural Foods,” “Jamba,” “Seattle’s Best Coffee,” “Rader Farms,” “T.G.I. Friday’s,” “Nathan’s Famous,” “Vidalia Brands,” “Poore Brothers,” “Tato Skins,” “Willamette Valley Fruit Company,” “Fresh Frozen,” and “Bob’s Texas Style.” The company’s manufacturing plants are located in Arizona, Indiana, Washington, Oregon, and Georgia.

On the chart, the stock has edged lower since trading at a 52-week high of $14.50 on March 26, 20… Read More

The Great Crash of 2014

A stock market crash bigger than what happened in 2008 and early 2009 is headed our way.

In fact, we are predicting this crash will be even more devastating than the 1929 crash…

…the ramifications of which will hit the economy and Americans deeper than anything we’ve ever seen.

Our 27-year-old research firm feels so strongly about this, we’ve just produced a video to warn investors called, “The Great Crash of 2014”

In case you are not familiar with our research work on the stock market:

In late 2001, in the aftermath of 9/11, we told our clients to buy small-cap stocks. They rose about 100% after we made that call.

We were one of the first major advisors to turn bullish on gold.

Throughout 2002, we urged our readers to buy gold stocks; many of which doubled and even tripled in price.

In November of 2007, we started begging our customers to get out of the stock market. Shortly afterwards, it was widely recognized that October 2007 was the top for stocks.

We correctly predicted the crash in the stock market of 2008 and early 2009.

And in March of 2009, we started telling our readers to jump into small caps. The Russell 2000 gained about 175% from when we made that call in 2009 to today.

Many investors will find our next prediction hard to believe until they see all the proof we have to back it up.

Even if you don’t own stocks, what’s about to happen will affect you!

I urge you to be among the first to get our next major prediction.
See it here now in this just-released alarming video.

This is an entirely free service. No credit card required.

We hate spam as much as you do.
Check out our privacy policy.