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Stock Market

Zach Abraham In US News & World Report: “It Might Be A Good Time To Explore European Equities”

By | Geopolitical Affairs, On TV, Stock Market

Fixed-income investors looking for yield are struggling in the near-zero interest rate environment in the United States. According to Zach Abraham and other financial industry experts interviewed in US News & World Report yesterday, there may be opportunities in European equities.

When considering European stocks that pay dividends, it’s important for fixed-income investors seeking an income stream to remember that many European companies pay out their dividends only twice a year, instead of quarterly as many American companies do. Also, the fluctuating exchange rates between countries can impact dividends for American investors.

To decide whether any dividend-paying stock is a good investment, it’s important to analyze the business and make sure it has a reasonable valuation. “For dividend-paying stocks, the best place to start is looking at a company’s balance sheet to see if the company can sustain the dividend,” says Zach Abraham, principal and chief investment officer at Bulwark Capital Management in Tacoma, Washington, just outside Seattle.

Zach says that when comparing European companies’ valuations versus those in America, here “we have record valuations, record corporate debt levels, yet you have valuations in the stock market that suggest to you that everything is humming along,” Zach says. In the U.S. in particular, corporate debt levels are rising, and Zach Abraham recommends looking at a company’s debt obligations when evaluating them. “The higher the debt on a company’s balance sheet, the more likely that company is to cut back or suspend that dividend,” he says.

He warns investors that there’s never been a period in America where stock market valuations have been this detached from the underlying economic fundamentals. “In the U.S., the Nasdaq is up in a year where we’ve sustained the biggest economic shock in our history.”

European markets have also been hit by the pandemic; however, Abraham says that “they’re far from trading at record high valuations. Due to the damage the valuation spread has done to the economy, European equity prices are attractive with more upside,” Zach says.

 

Read the whole story here:

https://money.usnews.com/investing/articles/investors-searching-for-yield-in-euro-stocks

The article also appeared on WTOP News.

The Stock Market Rally: Zach Abraham Weighs In

By | Stock Market

Regardless of the pandemic, stocks closed near session highs on Wednesday, July 8, and Zach Abraham, Chief Investment Officer and Principal at Bulwark Capital, says that the Fed is largely responsible. The stock market is just not paying attention to corporate revenues or earnings right now.

Apple hit a record high after a Deutsche Bank analyst hiked his price target on the stock. Fellow tech giants Microsoft, Netflix and Amazon also saw gains even as the number of coronavirus cases in the U.S. hit a new single-day high. Twitter stock also rose as their hint of rolling out a subscription service led investors to speculate that the company might better be able to monetize their social media platform, which Zach says they need to do.

In fact, the Federal Reserve is not going to stop; they are the biggest catalyst of stock rises the U.S. is seeing across the board. The stock market rally we are experiencing could roll on a lot longer as the Federal Reserve pulls out all the stops, including purchasing corporate bonds, lowering interest rates to near zero, and expanding its Main Street Lending Program to allow more small and medium-sized businesses to be able to receive support.

 

Watch the whole interview here: https://cheddar.com/media/stocks-close-near-session-highs-as-apple-sets-record

Zach Abraham Weighs in On the EU’s Historic Coronavirus Stimulus Package

By | Geopolitical Affairs, Investments, Stock Market

Zach Abraham’s comments on the historic European Union’s $826 billion coronavirus stimulus package (750-billion-euro) were recently featured on both Bezinga.com* and Yahoo! Finance.

 

The European Union is proposing a ($824 billion) coronavirus recovery plan to assist the bloc with its recovery. The funds, as well as targeted reinforcements to the long-term EU budget for 2021-2027, will bring the total financial firepower of the EU budget to 1.85 trillion euros, according to the European Commission.

EU Must Evolve To Survive, CIO Zach Abraham Says

“While the EU relief package will certainly help things in Europe, it appears to be more of a stop gap measure and pales in comparison to actions taken by the U.S. government,” said Zach Abraham, chief investment officer and principal at Bulwark Capital Management.

“Although we are keeping a watchful eye on all ECN and EU relief measures, we are far more focused on recent comments by Macron and Merkel that point to a willingness or at least an openness to a tighter fiscal union.”

In Abraham’s view, the EU cannot continue as it is structured today.

“Either Germany will have to relent on ECB guidelines which restrict the central bank from applying unilateral QE and other forms of monetary stimulus (currently the ECB can only apply monetary stimulus evenly across all member countries) or more countries, specifically Italy and Spain, will be forced to leave.” This issue is far more critical to the economic prospects of the EU as a whole, the professional investor said.

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Interestingly, Germany announced it was seeking a fresh $112 billion coronavirus stimulus package, just days after the EU launched its historic $826 billion plan: https://markets.businessinsider.com/news/stocks/germany-economy-112-billion-coronavirus-stimulus-rescue-plan-2020-6-1029271636

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You can read the original articles here:

https://finance.yahoo.com/news/european-union-sets-750-billion-192730975.html

https://www.benzinga.com/news/20/05/16115773/european-union-sets-out-750-billion-euro-coronavirus-recovery-plan

* With an estimated unique monthly visitor count of almost 1.5 million, Benzinga is a news and analysis service that focuses on global markets. It provides original, accurate and timely global financial content and features articles from industry experts and experienced analysts.

Zach Abraham On April 17: ‘We’re Seeing a Bear Market Rally’

By | In The Headlines, Market Risk, News, Stock Market

Zach Abraham, Chief Investment Officer and Principal at Bulwark Capital Management, appeared on Cheddar.com again on Friday, April 17, live from the New York Stock Exchange, to discuss the effect that the coronavirus outbreak was having on stock markets. At that time, markets were at their highest point since March 10.

“Right now, the market is trading based on coronavirus news, which we think is a mistake. We equate it to focusing on a hurricane—nobody’s obsessed about when the hurricane will be over, the question is, what damage is left will be left in its wake?”

Zach went on to make the point that the market being up is, of course, a good thing, as is news of a potential vaccine being announced by Gideon, “We’re all cheering for that.” Also, he doesn’t have a crystal ball—no one does. But he urges caution since a vaccine could take 11 months or longer, and he encourages investors to start looking more closely at underlying market fundamentals being exacerbated by the coronavirus. “They’re bad, they’re really bad. You’ve got the S&P at a 22 price-to-earnings (PE) ratio going into the most severe economic shock in history. I’m just going to bet that doesn’t last; it’s not warranted.” Zach said he expects some potentially shocking earnings reports in the upcoming year from companies who simply cannot forecast sales accurately at this time, or what may happen with some of their divisions due to unpredictable future economic fallout.

Watch the full episode here: https://cheddar.com/media/stocks-close-higher-dow-hits-for-first-time-since-march

 

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ABOUT CHEDDAR.COM

Cheddar is a streaming digital video service that broadcasts live from the floor of the New York Stock Exchange (NYSE) daily. Focused on business-minded millennials, the service highlights tech and consumer stocks while also covering the intersection of tech, media, news and culture.

 

Follow this link to the Cheddar.com web page: https://cheddar.com/media/stocks-close-higher-dow-hits-for-first-time-since-march

Zach Abraham: Coronavirus’ Effect on Cryptocurrency ‘Unpredictable’

By | Investments, Market Risk, News, Stock Market

Zach Abraham was recently quoted by Decrypt Debrief in their article, “Coronavirus, Bitcoin and the economy: what can we expect?”

Zach Abraham, Chief Investment Officer of financial services firm Bulwark Capital Management, agreed that the current economic situation is “incredibly unique,” and hard to predict.

“This is a different situation than 2008 but in some ways it’s much more unpredictable as the problems caused by excess are in every market,” he said. “The variables are endless and most of them aren’t looking too hot at the moment.”

You can read the full article HERE.

 

 

Zach Abraham Appears on Yahoo! Finance

By | In The Headlines, Investments, Stock Market

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:

https://ca.finance.yahoo.com/video/more-government-injects-more-movement-164456333.html

Stock Market Volatility: It Helps to Look Backward

By | Stock Market

Obviously, many of our clients are worried about the news, the headlines about coronavirus, and the drops in the stock market happening at the time of this writing.

As you know, our firm focuses a lot of attention on protecting your savings as you near retirement. But for some of our clients (depending on their unique circumstances), part of their portfolio—and/or part of their 401(k) or other retirement funds—are still subject to stock market risk. The reason for this is that based on historic return data: the stock market can offer the highest returns over time, and so might still be part of your overall retirement plan design.

The Stock Market Is a Long-Term Strategy

Some of our clients are all set with their retirement income plan, so their concerns are not for themselves. They are worried about their children and grandchildren, and how the stock market drops will hurt their loved ones’ finances.

We would like to remind everyone that it’s helpful to look backward.

The first market crash happened in Europe in 1634, when Dutch tulips bottomed out. (There’s a period movie called “Tulip Fever” that dramatized this one.) In the United States, the first major crash (and worst so far) happened in 1929. It took America 12 years to recover from the “Great Depression,” but we did recover, and went on to enjoy some of the greatest prosperity in our history.

But we’ve weathered more recent stock market collapses, too. Like the one in 1987 when “Black Monday” brought the largest single-day market loss in U.S. history. And there was the Dot.com bust of 2000. And of course, the “Great Recession” of 2008.

The thing is, historically every eight years or so we have experienced some sort of market correction. We were well overdue for this current market volatility; it’s been 12 years of experiencing primarily a bull market since 2008. Our firm has been talking with our clients about the possibility of a market correction for the last four years; indeed, we’ve been planning for it.

We view the stock market as just one of the tools in your financial planning arsenal—the tool with the longest timeline. To quote Warren Buffett: “The stock market is a device for transferring money from the impatient to the patient.”

In other words, although no one can predict the future, based on historic market performance your children and grandchildren probably have time to recover, and most likely, prosper. (This might even be a good time for them to pick up some bargains, depending on their circumstances.)

For you, if you do not have a retirement plan in place to help balance growth plus protection of your assets in volatile times, please call us. There are options to investing in the market.

Contact Bulwark Capital Management in Tacoma, Washington at 253.509.0395. We look forward to speaking with you!

 

 

Source: https://en.wikipedia.org/wiki/List_of_stock_market_crashes_and_bear_markets

Zach Abraham Discusses the Coronavirus Outbreak’s Impact on Markets

By | In The Headlines, Market Risk, Stock Market

Zach Abraham again appeared on Cheddar.com, a show broadcasting live from the New York Stock Exchange, to discuss the effect that the coronavirus outbreak is having on stock markets.

As the coronavirus spreads around the globe, it continues to drag down markets. Zach says one of the biggest misconceptions out there is that the coronavirus outbreak might be a transient threat. The central banks may not be able to stop the losses by “juicing” markets with more cash, because both the supply chain from China and the demand side from consumers are being hit.

There are anomalies all over the market when you examine the data; it’s not just the Treasurys we should be looking at. Corporations are at record levels of debt, which has tripled since 2007. And this debt is at its lowest quality in history, with over 50% of it rated lower than BBB. The spread between debt and earnings, as well as negative cash flows, are also of concern.

Watch the full episode here: 


 

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ABOUT CHEDDAR.COM

Cheddar is a streaming digital video service that broadcasts live from the floor of the New York Stock Exchange (NYSE) daily. Focused on business-minded millennials, the service highlights tech and consumer stocks while also covering the intersection of tech, media, news and culture.

 

Follow this link to the Cheddar.com web page: https://cheddar.com/media/coronavirus-crushes-markets-outlook-for

Zach Abraham Discusses the Phase One China Trade Deal

By | In The Headlines, Investments, On TV, Stock Market

On January 13, Zach Abraham appeared on Cheddar.com, a show which broadcasts live from the New York Stock Exchange, to discuss phase one of the trade deal which at that time had just been negotiated between China and the United States.

In the broadcast, Zach Abraham, Principal and Chief Investment Officer at Bulwark Capital Management, made the point that he sees the actions of the Federal Reserve and other central banks in pumping money into markets as more important and meaningful in terms of market performance than phase one of the trade deal with China.

Zach says tech stocks, the energy sector, the upcoming presidential election, and other economic factors are also at play. Watch the full episode here:

 

ABOUT CHEDDAR.COM
Cheddar is a streaming digital video service that broadcasts live from the floor of the New York Stock Exchange (NYSE) daily. Focused on business-minded millennials, the service highlights tech and consumer stocks while also covering the intersection of tech, media, news and culture.

Follow this link to the Cheddar.com web page: https://cheddar.com/media/u-s-and-china-expected-to-sign-phase-one-trade-deal-wednesday