By Michael Lombardi, MBA | August 11, 2014
The Bureau of Economic Analysis (BEA) surprised even the most optimistic of economists when it reported the U.S. economy grew at an annual rate of four percent in the second quarter of 2014.
On the surface, the number—four percent growth—sounds great. But how serious should we take that gross domestic product (GDP) figure?
Firstly, I’d like to start by pointing out that the BEA often revises its GDP numbers downward. … Read More
By George Leong, B.Comm. | July 18, 2014
A few years ago, investors couldn’t get enough of Chinese stocks. This led to numerous frauds committed by crooks in China that has since tarnished the reputation and reliability of all Chinese companies, whether they’re legitimate or not, despite their operating in one of the top growth areas in the world.
While I’m not focused on Chinese stocks at this moment due to better trading opportunities in the domestic stock … Read More
By Michael Lombardi, MBA | June 11, 2014
Five years ago, it looked like the world was falling apart. Remember when Lehman Brothers went bankrupt, freezing financing on Wall Street? The government had to bail out General Motors and the Federal Reserve pumped money into too-big-to-fail banks. Investors were running scared of the stock market.
Seems like years ago…but it was only 2008 and 2009 when this all happened. Fast-forward to today, and thanks to trillions of dollars … Read More
By Michael Lombardi, MBA | May 5, 2014
I keep hearing about the economy improving, but I keep asking, where? I ask because the facts continue to say otherwise.
The U.S. Bureau of Economic Analysis reports gross domestic product (GDP) came in at just 0.1% in the first quarter of 2014. To remind my readers, in the fourth quarter of 2013, U.S. GDP grew by 2.6%. (Source: U.S. Bureau of Economic Analysis, April 30, 2014.)
These GDP figures … Read More
By Michael Lombardi, MBA | April 8, 2014
Is the Federal Reserve ignoring the very basic law of economics…the law of diminishing marginal utility? You remember that term from economics in high school. The law of diminishing marginal utility states that the more of something you have, the lesser its impact on you.
The Fed has been printing money in hopes of stimulating growth in the U.S. economy. As the Fed printed more paper money, its balance sheet … Read More
By Michael Lombardi, MBA | March 6, 2014
Consumer 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
By Michael Lombardi, MBA | February 19, 2014
In 2013, the U.S. economy, as measured by gross domestic product (GDP), rose at an average rate of 1.9% compared to 2.8% in 2012. And as it stands, GDP may slow further in 2014.
What makes me think this?
In January, U.S. industrial production declined by 0.3% from the previous month. This was the first decline in production since August of 2013. Production of automotive products in the U.S. economy … Read More
By George Leong, B.Comm. | October 7, 2013
While the focus is on the government shutdown and debt ceiling, I’m getting ready for the start of another earnings season, to see if America delivers. Of course, the somewhat muted gross domestic product (GDP) growth has me fully expecting to see a drag in revenues across the broad.
Alcoa Inc. (NYSE/AA) starts the third-quarter earnings season when it reports after the markets close tomorrow. The company is a pretty … Read More
By George Leong, B.Comm. | September 24, 2013
Analysts and investors demand clarity when a company reports or offers up guidance. But when it comes to the Federal Reserve, investors and analysts don’t seem to demand the same level of clarity, even though the central bank has been what I would label “wishy washy” as far as its policies and what it offers up to the market.
The stock market is trading (and it has been for a … Read More