In an article published on January 19th, 2021 in Newsweek, “Stock Market on Best Election Day to Inauguration Run Since World War II,” Bulwark Capital Management Chief Investment Officer, Zach Abraham, gave his insights into the Biden presidency along with the Federal Reserve’s policies and their potential future effect on the stock market.
He was featured along with analysts from Goldman Sachs, the chief investment strategist at CFRA in New York, and the U.S. Chief Economist at S&P Global Ratings.
Here are Zach’s comments:
“I think the stock market will continue to go higher, perhaps much higher.”
“The only two times we’ve had valuations anywhere close to this were in 1929, when the markets dropped 85% over the next two years, and 1999, when the Nasdaq dropped 85% over the next two years,” he said. “I don’t think a selloff that dramatic is going to happen again because of the underwriting by the Fed and the US government.”
Last year, the Fed’s action and stimulus spending approved by Congress injected about $8 trillion into the economy,” Abraham said. “The amount of cash that’s been poured into this market is mind-boggling.”
But to be clear, it’s the Fed that’s driving the market, he said.
“If the Fed continues to do that, stocks will keep going up. If it stops doing that, they won’t,” Abraham said. ” All that money injected into the system last year had to go somewhere. Part of it ran headlong into a stock mania that had been 13 years in the making, since the financial crisis of 2007-2008. It’s just gone ballistic.”
Read the full article here: