Zach Abraham, Principal and Chief Investment Officer of Bulwark Capital Management, appeared on Yahoo! Finance on March 13 to discuss the coronavirus outbreak and its impact on stock markets.
Back on March 13, the date of this interview, Seattle was the area of the United States hit first by the coronavirus—it was right on the front line with the COVID-19 outbreak. (Seattle is located about 34 miles from Bulwark Capital Management’s headquarters in Tacoma, Washington.) During the interview, Zach Abraham predicted at the time that people “might not be taking [the virus] seriously enough,” though the stock market certainly already was.
That afternoon, the government was expected to announce measures to help the economy, and Zach said that government intervention might stem the market sell off and help move markets to the positive. “We have a market that’s been fueled by the central banks’ intervention for the last decade, so there is a ‘Pavlovian’ psychological response built-in for that.”
But he warned about the long-term. “No one has a crystal ball, but one of the things we’ve been talking about for the last several years is that eventually the world is going to have to face some issues—something that more debt and printed money won’t fix.” For example, the drop in oil demand is just one example of how the corporate high-yield debt market could become a future negative factor for markets.
But with any economic crisis, It’s never just one thing or one issue at play. “I personally think that it will be at least a six- to eight-month timeline or longer to see the full effects of this market—to get economic clarity in terms of what the real backdrop is.”
Watch the full episode at this link: