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Cathie Wood: Corporate over-concentration indicates inflation will ‘deflate’

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Cathie Wood: Corporate over-concentration indicates inflation will ‘deflate’

Cathie Wood said that the huge reserves that US companies have amassed indicate that inflation will soon begin to de-escalate.

“I have never seen stockpiling this amount in my career and I have been in the market for a long time,” the head of Ark Investment Management said in an interview with Bloomberg Television on Wednesday. “The issue of stocks indicates the closure of the current cycle, inflation will decline.”

The key players in the retail trade have amassed huge reserves in 2021 amid a huge increase in consumer demand and supply chain disruptions, resulting in them now struggling with excessive quantities in their warehouses. On Tuesday, Target cut its earnings forecast for the second time in three weeks, mainly due to rising stocks.

Inflation and the start of interest rate hikes by the Federal Reserve have put pressure on Ark funds, which invest primarily in innovation. The key Ark Innovation ETF has fallen 50% by 2022. While investors have been largely discouraged by fears of inflation, “the biggest risk is by far deflation,” Wood said.

As for Tesla, one of the biggest bets of Ark, which started buying shares again after their 50% sinking, Wood noted that her strong man, Elon Musk, should stay and watch the piece closely. of the production of autonomous vehicles.

“He does not have to be personally involved in the electric vehicle segment, but he should be there for the autonomous vehicle industry,” Wood said.

At another conference in Sydney, the strong lady of Ark said that investors underestimate how strongly Zoom Video Communications will dominate in the cloud space. The share of the latter has fallen 37% in 2022.

Source: Capital

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