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

U.S. economy

Why I Expect a Big Boost in This Company’s 2015 Dividend Payout

By | October 22, 2014

Company 2015 Dividend PayoutEven with the recent price retrenchment, there’s not a lot of value circulating in this stock market. Everything’s already gone up and the capital gains have been great the last few years. But it’s still a slow-growth environment in the global economy, and despite a very accommodative monetary policy, stocks can’t go up forever without experiencing a meaningful retrenchment.

Company earnings are pouring in and there have been some disappointments. … Read More

About That QE4…

By | October 20, 2014

Another Round of Money Printing Coming SoonIt’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

What the Fear Index Is Telling Us About Stocks Now

By | October 17, 2014

Why This Stock Market Rout Is Here to StayOver 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

Off-the-Radar Company Delivering Attractive Earnings

By | October 13, 2014

One Off-the-Radar Company with Attractive ResultsOn the day that the DOW, S&P 500, and NASDAQ Composite dropped two percent on global growth worries, once again, several companies reported very good numbers.

But investors are paying less attention to corporate results and more attention to economic news from around the world that suggests that the only mature economic engine running at any positive speed currently is the U.S. economy.

PepsiCo, Inc. (PEP) had another good quarter. … Read More

Why Stock Buybacks Will End Up Being a Terrible Investment for Companies

By | October 10, 2014

Great Stock Buyback MirageIn these pages, I have been very critical about stock buybacks by companies on the key stock indices. I see them as nothing more than a form of financial engineering used to manipulate per-share corporate earnings…and a bad investment for the companies buying their stocks back.

According to data compiled by Bloomberg and the S&P Dow Jones Indices, companies on the key stock indices are expected to spend $914 billion … Read More

Financial Reports

What Job Growth? Labor Participation Hits 30-Year Low

By | October 9, 2014

Job GrowthFinally, some good news for the U.S. economy?

Last week, the U.S. Bureau of Labor Statistics reported 248,000 jobs were created in the U.S. economy in September, pushing the unemployment rate down to 5.9% from 6.1% the previous month. (Source: Bureau of Labor Statistics, October 3, 2014.)

The September jobs market report showed good job creation in sectors like professional and business services, information, mining, construction, and financial. Combined, these … Read More

The Flight Back Down to Reality Ahead for the Rich

By | September 26, 2014

Stock Market Bubble Starting to Show Signs of StressSix years ago this month, in the midst of the Great Recession, Lehman Brothers, one of the most well-known investment banks in the U.S. economy, filed for bankruptcy.

At the time, Lehman’s bankruptcy sparked widespread worries…and the U.S. financial system teetered on the verge of collapse. For those of us who remember that time, there was too much uncertainty.

So, the Federal Reserve and the government stepped in to help … Read More

About That 500% Jump in Interest Rates…

By | September 22, 2014

Economy and Stock Market Handle a Five-Fold Jump in RatesThe verdict is in…

Last week, at the end of its regularly scheduled meeting, the Federal Reserve said:

1)      It would continue to reduce the amount of money it creates each month. The Fed said it will be out of the money printing business by the end of this year. By that time, the Federal Reserve will have created more than $4.0 trillion new American dollars (out of thin air)…. 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

What the Worst Jobs Report of the Year Really Tells Us

By | September 12, 2014

What We Found Buried in August’s Jobs ReportA week ago today, the Bureau of Labor Statistics (BLS) released its jobs market report for the month of August. To say the very least, there was nothing in that report that says the labor market in the U.S. economy is back on its feet. In fact, the report painted a gruesome image of employment in this country.

In August, 142,000 jobs were added to the U.S. economy—the lowest monthly … Read More

« Older Entries