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

gold

The Nine-Month Check-Up

By | October 1, 2014

Nine-Month Check-UpWith nine months behind us this year, today we look at how two popular forms of investment have done in 2014 and where I think they are headed for the remainder of the year.

Starting with stocks, the Dow Jones Industrial Average closed yesterday up 2.8% for the year. Given the risk of the stock market, 2.8% is no big gain. I wrote at the beginning of 2014 that the … Read More

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

By | 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 … Read More

Having Trouble Coming Up With Four Hundred Bucks

By | August 15, 2014

Economic Growth in 2014The burning question that’s facing economists like me today and that will only be answered in the future: did creating $3.0 trillion in new money out of thin air really make things better or worse for America?

My personal view, as expressed in these pages, is that the rich (the big banks and Wall Street) got richer from the “printing press” era, while the average American did not directly benefit … Read More

The Question Everyone Is Asking This Morning

By | August 1, 2014

Stocks Turn Negative for 2014; Likely to Get WorseYesterday, the Dow Jones Industrial Average fell 317 points, while the NASDAQ Composite Index fell 93 points—respective losses of about two percent per index. This morning, stock market futures are down again.

As a reader of Profit Confidential, this “rout” we are now in should come as no surprise. I have been writing for months how overpriced the stock market has become, how the stock market has become one … 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

Financial Reports

Taking It Too Far Again…

By | July 11, 2014

Why Interest Rates Will Rise Faster and Sooner Than Most ThinkWhat led to the 2008/2009 stock market and real estate crash and subsequent Great Recession can be attributed to one factor: the sharp rise in interest rates that preceded that period.

In May of 2004, the federal funds rate, the bellwether rate upon which all interest rates in the U.S. are based, was one percent. The Federal Reserve, sensing the economy was getting overheated, started raising interest rates quickly. Three … Read More

Stock Market Pricing-in a Recession?

By | July 2, 2014

U.S. Economy Close to Technical RecessionBy no surprise to me whatsoever, the government’s third and final estimate of first-quarter U.S. gross domestic product (GDP) came in at a negative annual pace of 2.9%. (Source: U.S. Bureau of Economic Analysis, June 25, 2014.) The U.S. economy’s growth rate in the first quarter of this year was the worst since 2009.

I’ve been writing since the fall of 2013 that the U.S. economy would see an economic … Read More

Why I Never Pay for Coffee at Sam’s Bakery

By | June 16, 2014

Grains of coffee and dollarsThere’s a local bakery near my office I try to get to at least once a week. Sam and his wife own the bakery, and Sam is usually the one there serving espressos and cappuccinos to the many small business owners who meet there early in the morning to talk about business and the economy.

My problem is that I never pay for coffee at Sam’s bakery. “Don’t worry Michael, … Read More

About That Letter My Dad Got in the Mail Friday

By | June 9, 2014

Pay a Bank to Hold Your MoneyMy father is 87 years old. He’s in great shape, drives on his own, plays cards with the guys each afternoon, and has basically been enjoying retirement since he sold his business when he was 65.

Like all retirees, he and my Mom have been living off their savings for years.

And like millions of Americans, the low interest rates we have been enduring since the Federal Reserve decided back … Read More

The New Land of Oz

By | May 28, 2014

When Gold Will Finally BottomYesterday was an amazing day for the markets.

Gold bullion hit a three-month low despite: 1) inflation rising rapidly in North America; and 2) the Chinese buying half of this year’s world gold production.

The stock market was up to a new high despite: 1) corporate insiders selling like mad; 2) corporate earnings growth collapsing; 3) the amount of money investors have borrowed to buy stocks standing at a record … Read More

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