By Michael Lombardi, MBA | October 31, 2014
According to research by UC Berkeley, in 2012, the top one percent of income earners in the U.S. earned 22.5% of all the income. The bottom 90%, on the other hand, earned less than 50% of all the income. (Source: Pew Research Center, January 7, 2014.) Income inequality in the U.S. economy is the highest it has been since 1928. The rich are getting richer, and the poor are seeing … Read More
By Mitchell Clark, B.Comm. | October 31, 2014
Credit card companies are some of the best indicators in the global economy. Visa Inc. (V) just reported a pretty decent quarter. While earnings were down comparatively due to a one-time charge, adjusted earnings handily beat consensus.
The company’s fiscal fourth quarter came in solid, with growth of 10% on a constant dollar basis to $3.2 billion compared to the same quarter last year.
Recently, the company increased its quarterly … Read More
By Michael Lombardi, MBA | October 20, 2014
It’s widely expected that at the end of this month, the Federal Reserve will end its third round of quantitative easing (that began in September of 2012). This is QE3, where the Federal Reserve was printing $85.0 billion of new money every month and using it to buy U.S. Treasuries and mortgage-backed securities (MBS). In the beginning of 2014, the Fed started reducing the amount of money it was printing … Read More
By Mitchell Clark, B.Comm. | October 20, 2014
Amid all the turmoil in capital markets, I’m reminded of all the good corporate earnings being released.
Of course, the stock market is a system of discounting future business conditions and the recent sell-off has been pronounced, but stocks have come so far over the last several years. If the catalysts were deflationary pressures among oil prices and global economic activity, a little haircut in share prices is well deserved…. Read More
By Michael Lombardi, MBA | October 17, 2014
Over the past few months, I warned my readers the stock market had become a risky place to be. While I also suggested euphoria could bring the market higher than most thought possible—to the point of irrationality—the bubble has now burst. Key stock indices are falling and fear among investors is rising quickly.
Please look at the chart below of the Chicago Board Options Exchange (CBOE) Volatility Index (VIX). This … Read More
By Mitchell Clark, B.Comm. | October 17, 2014
While corporate earnings continue to come in solid, stocks continue to be sold.
It’s not all the time that stocks follow oil prices, but they certainly have this time around and the selling momentum has gained on deflationary pressures from producer prices to declining expectations for global economic growth.
And the selling is happening to companies that beat consensus with their earnings, like J.B. Hunt Transport Services, Inc. (JBHT), which … Read More
By Michael Lombardi, MBA | October 15, 2014
Now that the Dow Jones Industrial Average has fallen 1,035 points (six percent) from its mid-September peak, the question investors are asking is “how far will she go?” For small-cap investors, the drama is greater, as the Russell 2000 Index has fallen 12.5% from its July peak.
Since 2009, every market pullback presented investors with an opportunity to get back into stocks at discounted prices. Even some editors here at … Read More
By Mitchell Clark, B.Comm. | October 10, 2014
One large-cap that always reports early is Costco Wholesale Corporation (COST). The company’s numbers came in solid.
Costco hit a wall not too long ago and was hard pressed to produce growth. But the company’s latest quarter beat the Street with considerable sales strength in the month of September.
In its most recent quarter, there was considerable growth in the company’s cash position and shareholders’ equity improved significantly.
For the … Read More
By Michael Lombardi, MBA | October 3, 2014
According to the Investment Company Institute, assets in institutional money market funds increased $17.19 billion to $1.69 trillion for the week ended on September 24, 2014. This was the biggest weekly increase in these money market funds in the last five months. (Source: Investment Company Institute web site, last accessed October 1, 2014.)
This is critical: when institutional investors sense the risk of a stock market sell-off in key stock … Read More