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

inflation rate

The Era of Financial Insanity

By | July 30, 2014

What Happens Next for the Stock MarketMy colleague Robert Appel (BA, BBL, LLB) issued a research paper to the subscribers of one of his financial advisories earlier this week. I thought it important that all my readers be aware of and understand the crux of what Robert is saying about our current economic situation and where it will eventually lead.

Here it is:

“The actions of the Federal Reserve (how far they went to ‘stabilize’ the … Read More

Are We Really Headed for Deflation?

By | March 25, 2014

Forget Deflation; Inflation Is Becoming a Big ProblemThe Bureau of Labor Statistics (BLS) reports inflation in the U.S. economy increased by 0.1% in February from the previous month. (Source: Bureau of Labor Statistics, March 18, 2014.) As usual, these numbers have again brought up the theory of deflation—a period when general prices decline.

Reasons for the deflation fear? In 2013, inflation for the entire year was 1.5%. In 2012, it was 1.9%. Going back further, in 2011, … Read More

Why You Shouldn’t Be Fooled by the Market

By | August 20, 2012

Why You Shouldn’t Be Fooled by the MarketFollowing a weak second quarter, the Dow Jones Industrial and S&P 500 indices are now in positive territory for the first time since the end of the first quarter on the backs of a positive July and August.

So far, August has proven strong for technology, growth, and small-cap stocks, with the NASDAQ and Russell 2000 up 4.2% and 3.4%, respectively, as of the close of Thursday. The S&P 500 … Read More

Corporate Profits Meeting Expectations— Stock Market Action Positive

By | July 20, 2012

Corporate Profits Meeting ExpectationsThe stock market is ticking higher in the face of continued weak economic news, and it’s mostly due to the good corporate profits we’re getting. For the most part, we’re so far seeing good corporate profits, because expectations were already reduced. Some companies are slightly reducing their outlooks for the rest of this year, but the declining visibility is modest. Corporations are being extremely conservative with their forecasts and rightly … Read More

Dividends Income: From Bubbles to Crashes, It Always Wins in the End

By | June 28, 2012

Dividends IncomeIn recent history, without dividends, stock market investors would generally be losing money. And this doesn’t include losses relative to the inflation rate. It’s been such a difficult stock market for the last decade, and the extreme volatility serves to illustrate just how risky equity securities can be.

In the 80s and the 90s, the best bet in town was the technology sector. The bull market was so strong that … Read More

Financial Reports

Stock Market Action Has Turned Positive and So Have the Prospects for Gold

By | June 20, 2012

The stock market is behaving extremely well considering the huge amount of investment risk in the global marketplace. There is, however, no other place for investors to put their money and be able to generate income (dividends) that beats the inflation rate. All assets are risky: real estate, gold, the stock market and even cash. Investor sentiment is all over the map these days and it’s the new reality in … Read More

You Know the Market’s Worried When Spot Gold Moves up with the U.S. Dollar

By | June 15, 2012

dividend paying stocksInvestor sentiment continues to be best reflected in oil prices, which keep taking it on the chin. Certainly there’s an argument to be made that low oil prices are good for the economy and stimulative, but a WTI oil price below $85.00 a barrel reflects a global marketplace that’s very worried about the future. The worry is about slowing growth or lack of growth in the world’s most important economies…. Read More

Why Getting the Business Cycle Right Is the Only Thing That Pays

By | June 13, 2012

dividend paymentTwo decades ago, everyone was making money from the stock market. There was a boom, and some of the best stocks were in the technology sector, mostly due to the proliferation of the Internet. You didn’t even need to own the best stocks; just owning the index was a profitable investment strategy. Then, the best stocks and the rest of the market came apart, because valuations got too extreme for … Read More

Stock Market Correction: Why it’s Limited

By | May 16, 2012

earnings seasonsUnless we get a major shock like war or something related to the sovereign debt crisis in Europe, I don’t think the stock market is going to experience a lot of further downside. Stock prices might drift and then trade range-bound for a couple more months, but stock market valuations are fair and this provides a lot of cushion.

I do think there is more downside potential in gold, silver … Read More

Dividend Increases Soar as Companies Return Excess Cash

By | April 30, 2012

U.S. economyAs expected, there have been a lot of dividends increases from big, brand-name companies with excess cash on their books. New business investment is somewhat lagging given all the risks in the marketplace, so it’s much easier for companies to increase their dividends and/or initiate new stock market buybacks. This is, after all, what stock market investors’ want.

It’s pretty clear that the U.S. economy isn’t accelerating; it’s just slowly … Read More

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