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

financial crisis

Why Stock Prices Will Continue to Fall

By | October 15, 2014

Stock Prices Will Continue to FallNow 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

Why the Old School Dow Theory Still Applies

By | September 19, 2014

The Most Important Stocks to FollowGetting a sense of where stocks are going to go in the year ahead is always difficult with the major indices at their all-time highs.

The fundamental backdrop is still very favorable for equities. While the Federal Reserve has put off raising interest rates for the near future, the cost of capital, especially for corporations, remains extremely low. And corporate balance sheets remain in excellent condition with strong cash positions … Read More

The Sobering Issue

By | July 25, 2014

Why Our National Debt Will Double From HereAccording to the U.S. Congressional Budget Office, next year, the government is expected to incur a budget deficit of $469 billion and then another budget deficit of $536 billion in 2016. (Source: Congressional Budget Office web site, last accessed July 21, 2014.) From there, the budget deficit is expected to increase as far as the projections go.

Yes, the government’s own estimates are that our country will run a budget … Read More

The Only Sector I See with a Ten-to-One Return Potential

By | June 27, 2014

Shattering the Myth Behind Interest Rates and GoldWe are hearing more and more about interest rates getting ready to rise. The Federal Reserve itself has said it expects the federal funds rate to increase to 1.5% by the end of next year and to 2.25% by the end of 2016.

Before the Fed came out with its forecast, I was writing about how the Fed will have no choice but to raise interest rates because inflation is … Read More

A Hot Sector of the Market I Feel Will Soon Be a Buy Again

By | June 26, 2014

Why Action in 3D-Printing Stocks Is Healthy for This MarketEverything in the stock market experiences its own cycle of enthusiasm among investors. And this is especially well illustrated among speculative issues.

There was a time only a few years ago when some of the hottest speculative stocks were in solar energy. Now this small equity universe is still trying to rebuild itself.

And in more recent history, 3D-printing companies experienced incredible capital gains, only to experience incredible capital losses … Read More

Is This What America Has Come To?

By | June 25, 2014

Five Years Later, Many American Still SufferingI’m going to put aside my daily ranting about the stock market and the economy today to bring what I believe is an important story to the attention of my readers.

There is no doubt you’ve heard about how poorly the city of Detroit, Michigan is faring now that the automotive sector has all but closed up there.

Yesterday, news came that the city has started cutting off water to … Read More

How to Create a Winning Portfolio in a Market at Its Highs

By | June 18, 2014

How to Build a Winning Portfolio in Four Simple StepsIt’s a difficult environment in which to be constructing new equity portfolios right now, mostly due to the very simple reason that the stock market is at an all-time record high and it’s likely that monetary policy will change soon.

But there is still a great deal of interest in equity securities and in a lot of cases, individuals require the income that they provide.

There are a lot of … Read More

The Downside to Dow 20,0000

By | June 13, 2014

Where the Stock Market Could Head NextWith the Dow Jones hitting 17,000 being pretty likely in the not-too-distant future, from there, it’s only another 18% or so until the Dow hits 20,000, which is pretty incredible.

These numbers seemed so unrealistic just a few years ago but now, it’s not too farfetched. The most amazing thing to me is that stocks still haven’t experienced a material price correction since the financial crisis.

Stocks aren’t necessarily stretched … Read More

Why Stocks Won’t Break Until This Indicator Does

By | June 4, 2014

The One Indicator Keeping This Market AliveThe Dow Jones Transportation Average keeps powering ahead, and the rest of the stock market is very close behind it.

The strong performance of this index is confirmation of further Dow theory gains. The Dow Jones Industrial Average has been fighting its way higher since May 20.

Some of the performances of transportation stocks have been truly spectacular and very much a reflection of a bull market.

Alaska Air Group, … Read More

Rise in Financials a Good Sign for the Broader Market?

By | May 29, 2014

Financials Supporting Bullish Stock Market SustainableThis stock market continues to show material resilience as financials have turned a bit and are helping the S&P 500 index.

Wells Fargo & Company (WFC) just hit a new record-high on the stock market with a forward price-to-earnings ratio of just under 12, offering a 2.8% current dividend yield.

Most of the big banks have actually been in a downtrend in recent months, including Bank of America Corporation (BAC), … Read More

« Older Entries