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

corporate profits

The Problem With Reality in 2014

By | July 28, 2014

U.S. Economy Halfway to a Recession AlreadyEarlier this month, Jeremy Siegal, a well-known “bull” on CNBC, took to the airwaves to predict the Dow Jones Industrial Average would go beyond 18,000 by the end of this year. Acknowledging overpriced valuations on the key stock indices are being ignored, he argued historical valuations should be taken with a grain of salt and nothing more. (Source: CNBC, July 2, 2014.)

Sadly, it’s not only Jeremy Siegal who has … Read More

And They Say the Economy Is Getting Better?

By | May 14, 2014

Four Largest World Economies Slowdown ModeThe Chinese economy had been growing at about 10% a year, like clockwork, for years. Now, China is in the midst of an economic slowdown, with growth expected to come in this year at 30%–50% below China’s five-year average growth rate.

Why is China’s economy growing so slowly, and why does it matter to us here in North America?

Manufacturing, the key component of China’s economy, is quickly slowing. The … Read More

Important Message Retailers Are Sending Us About the Economy

By | March 6, 2014

Consumer Spending Hits Trouble TerritoryConsumer spending in the U.S. economy is highly correlated to consumer confidence. If consumers are worried about the economy, they pull back on their spending.

The Conference Board Consumer Confidence Index decreased by 1.63% in February from January. (Source: Conference Board, February 25, 2014.) And we see the corresponding pullback on consumer spending in weak U.S. retail sales.

Macy’s, Inc. (NYSE/M) reported a decline of 1.6% in revenue in its … Read More

Why I Fell Asleep Last Night During the State of the Union

By | January 29, 2014

The Borrower of Last ResortLast night started out like every other State of the Union address I’ve seen…

The President told us all the good stuff about the U.S. economy, like how American corporate profits are at a record high, how the stock market is at record highs, how millions of new jobs have been created since the Credit Crisis of 2008, how the housing market is turning around, and on and on.

Like … Read More

Has the Stock Market Discounted Full Tapering by the Fed?

By | January 29, 2014

Stock Market Discounted Full Tapering by the FedWell, here we are with only a few days left for Ben Bernanke in his role as chairman of the Federal Reserve, which has also been aptly dubbed as America’s “money printing press.”

In his final meeting as the head of the most powerful central bank in the world, all eyes will be on Bernanke and whether he decides to initiate his second tranche by further reducing the Federal Reserve’s … Read More

Why I’m So Cautious About 2014

By | January 17, 2014

170114_PC_lombardiDon’t for a second believe consumer spending in the U.S. economy is improving!

J. C. Penney Company, Inc. (NYSE/JCP) has announced it will be closing 33 stores in the U.S. economy. By doing this, the retailer will save about $65.0 million a year starting in 2014. 2,000 employees will be let go. (Source: J. C. Penney Company, Inc., January 15, 2014.)

Macy’s, Inc. (NYSE/M) is also closing stores.

Best Buy … Read More

How You Can Beat the Higher Taxes Coming Up

By | November 13, 2012

Beat the Higher Taxes Coming UpAs the realization that the political structure in America is steering far more leftward sets in, businesses and investors are beginning to fear the substantial increase in dividend and capital gains taxes. Many investors have been searching for dividend yield to sustain income due to the absence of adequate bond yields. This area of income generation, dividend yield, will most likely be hit extremely hard with the increase in tax … Read More

What Just Happened at Yahoo! That You Should Know About

By | October 1, 2012

Yahoo! That You Should Know AboutMarissa Mayer, the new CEO of Yahoo! Inc. (NASDAQ/YHOO), recently spoke about her plans for the future of the company. As we all know, technology stocks in this sector are constantly evolving. At one time, Yahoo! was a giant among technology stocks; those days have long since passed. Growth in corporate profits has been evasive for the firm, and Mayer took this opportunity to voice her opinion on where the … Read More

A Chilling Indicator of What’s Ahead for the Economy

By | August 17, 2012

A Chilling Indicator of What’s Ahead for the EconomyEarlier this year, I introduced a popular key indicator—the Baltic Dry Index—that measures the shipping rates of transporting bulk dry commodities worldwide.

It is considered a key indicator because it gauges the demand of the basic raw material inputs that go into every factor of finished goods, building materials, and food.

This key indicator registers a high number when economies are strong because of strong demand for all commodities like … Read More

Dow Jones Transportation Index Signals Trouble Ahead

By | August 15, 2012

Dow Jones Transportation IndexIt is summertime, and you expect the trading action in the stock market to be subdued, but there’s a big divergence taking place, and it isn’t good. The Dow Jones Transportation Index is not confirming the primary trend of the Dow Jones Industrials or the S&P 500 Index. The divergence started in mid-July and follows a stock market with lackluster trading volume and poor breadth.

The Dow Jones Transportation Index … Read More

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