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Stock Market

Zach Abraham Featured on MSN Last Week

By | In The Headlines, News, Stock Market

On Monday, March 22nd, stocks finished higher as the 10-year U.S. Treasury yield was slightly down compared to its recent highs.

Bond yields recently have been rising on investor concern that a stronger economic rebound will lead to higher inflation. However, the Federal Reserve said that, although as pandemic recedes and the economy recovers prices will be pushed up, there was no sign yet that this will deliver unwanted inflation.

In fact, the Fed has said it believes an increase in inflation in 2021 will be temporary given COVID-19’s disruption to the labor market.

Bulwark CIO Zach Abraham watches trends closely, and implements investment strategies to help take advantage of all market conditions. His comments were published by MSN last week:

“The recent rise in rates should continue to compress multiples on high flyers and stocks with rich valuations,” said Zach Abraham, principal and chief investment officer of Bulwark Capital Management. “A rise in inflation should also result in a much more friendly environment for value stocks and dividend payers.

“We’ve had a historic run in growth. But the time for value has come. This rotation has a lot of kegs and should run for a while,” Abraham added.

 

Read the original story on MSN here:

https://www.msn.com/en-us/money/markets/stocks-rise-as-tech-gains-lead-wall-street-higher-nasdaq-up-17percent/ar-BB1eQbSu

The article was also picked up by The Street:

https://www.thestreet.com/markets/stock-market-dow-jones-nasdaq-bond-yields-032221

 

Silver Gets the GameStop Treatment: MarketWatch and Morningstar Feature Zach Abraham

By | Geopolitical Affairs, In The Headlines, News, On TV, Stock Market

Silver rallied by as much as 13% on Monday, February 1st to their highest intraday level since 2013, as a buying frenzy attributed to a post on Reddit last week suggesting a short squeeze on the precious and industrial metal continued. Silver futures for March delivery climbed to as high as $30.35 an ounce on Comex.

MarketWatch covered the rally on silver in a story that was also picked up by Morningstar. They spoke with Zach Abraham and several others familiar with what was taking place. Here are Zach’s comments:

 

The moves for the metal are “incredibly unusual — fair to say it’s unprecedented,” Zach Abraham, chief investment officer at Bulwark Capital Management, told MarketWatch.

“But we need to see if it can be done again. Remember, GME [GameStop] was a deeply undervalued and unique situation,” he said.

So far, what’s happened to silver in the last few days is “not even close” to what happened with the Hunt brothers, said Bulwark Capital’s Abraham, referring to the brothers who famously tried to corner the silver market four decades ago. During the Hunt brothers’ accumulation of the silver, prices of silver bullion rose from $11 an ounce in September 1979 to $49.45 an ounce in January 1980.

“In addition, they don’t control anything,” he said, referring to the Reddit crowd. “I think for this reason alone, going after a commodity like silver is futile.”

Still, many analysts had already been touting upbeat prospects for silver even before the Reddit-induced frenzy.

Abraham said his company invested in silver on expectations that a short squeeze in silver would occur, and didn’t take the Reddit WallStreetBets forum into consideration when investing.  

“Silver is still cheap. Not a bad idea to buy some for the long haul,” he said. “Might make sense to buy silver miners as well. Just know both can be extremely volatile.”

He believes that $100 silver prices aren’t out of the question during the next run for the metal. “Silver is horrifically undervalued, on a historical basis, compared to financial assets.”

 

Original article links:

https://www.marketwatch.com/story/silver-gets-the-gamestop-treatment-rallies-by-as-much-as-13-11612203674

https://www.morningstar.com/news/marketwatch/20210201476/silver-gets-the-gamestop-treatment-rallies-by-as-much-as-13

Zach Abraham Speaks Out About Robinhood, Reddit and GameStop

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

Headlines recently exploded on the topic of hedge funds and stock trading, as a group of day traders on the social media platform called “reddit” drove up stock prices for GameStop, Bed Bath & Beyond, AMC, Nokia and other historically-unloved stocks. GameStop gained as much as 1,000% in just two weeks. The volatile market action resulted in massive losses for some hedge funds.

Brokerages, including Robinhood, Interactive Brokers, TD Ameritrade and others, reacted by restricting users’ ability to trade certain stocks on Thursday amid the extreme volatility.

This caused public outrage, especially toward Robinhood, an online brokerage app named after a folk hero who steals from the rich to give to the poor and whose mission is to “democratize finance for all.”

Zach Abraham Comments

In an article titled, “Critics view Robinhood restricting GameStop trades as ‘an absolute travesty’,” featured on several news sites (including CNBC and MSN), Zach Abraham is featured prominently.

“Robinhood’s decision underscores some people’s belief that the deck is stacked against them,” says Zach Abraham, founder and chief investment officer of Bulwark Capital Management, where he advises retail investors.

Abraham characterizes platforms restricting trades for retail investors as “an absolute travesty,” noting that many of the Redditors’ moves weren’t just some “troll,” but calculated based on their own research. The hedge funds made “bad calls,” he says, and retail investors caught them on it.

“This is only going to perpetuate the wealth gap, and that the rich play by different rules,” says Abraham, whose firm sold its positions in GameStop last week. “If the roles were reversed, nobody would be saying a thing.”

Buyer Beware

At the same time, the situation has morphed into a dangerous game for other retail investors who read into the recent hype but don’t understand the risks involved in trading, Abraham says.

The stocks are currently “way over-priced,” says Abraham. Getting in now on the news-making names of the past few days would be akin to gambling.

“I could not emphasize more clearly for retail investors: Take those names off your screen and look elsewhere,” Abraham says. He predicts GameStop and other stocks will “blow up” in the coming days. “You just don’t want to be messing around with these names today.”

Original story links:
https://www.cnbc.com/2021/01/28/critics-call-robinhood-restricting-gamestop-trades-travesty.html
https://www.msn.com/en-my/money/savingandinvesting/critics-view-robinhood-restricting-gamestop-trades-as-an-absolute-travesty/ar-BB1dbINe

 

Watch Zach’s Appearance on Cheddar, a video news website covering Wall Street issues:

“In our view, they’re delivering a shot of democracy to the markets.” – Zach Abraham

President Elect Biden

Zach Abraham Discusses Biden Presidency with Investment News

By | Geopolitical Affairs, News, Stock Market

Financial advisors are navigating the uncertainty of Biden’s impact on markets and the economy, scrambling to prepare portfolios and client expectations amidst a cloud of uncertainty regarding taxes and economic growth prospects.

Several advisors weighed in with Investment News, including our founder and chief investment officer, Zach Abraham. Zach summed up the unprecedented environment by saying, “The stock market is really confusing a lot of people right now.”

“There is unequivocally a massive separation between the performance of financial assets and the underlying economy,” he added. “The markets started celebrating after the election because one party didn’t sweep it, there wasn’t a blue wave, and there wasn’t a Trump reelection that would make the cities burn.”

But, going forward from here, Abraham said the financial markets are expecting mountains of government stimulus to carry the economy until it can get past the COVID-19 pandemic and back to standing on its own.

“It is structurally impossible for this economy to perform at the level of 2019 at any point in the near future and asset prices will reflect that new reality without stimulus,” he said. “It will take some bumpiness in markets to wake up the politicians, but those guys aren’t afraid of spending.”

While some advisers are trying to help clients navigate the unknown of higher taxes, others are wondering if clients are becoming too complacent with a stock market that continues to defy gravity.

From a pure stock market perspective, most data show that U.S. presidents typically get too much blame for down markets and too much credit for up markets.

An analysis compiled by John Bernstein, founder of Bernstein Financial Advisory, which measured stock market performance in two-year election cycles dating back to 1928, found that the political party in power was only responsible for about 2% of the stock market’s total performance.

Read the full story here: “Financial advisers navigate the uncertainty of Biden’s impact on markets, economy.”

 

 

 

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.