Here’s the market move Cathie Wood says is ‘ridiculous’ as her flagship fund sputters

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Kathy Wood, Star Fund Manager and Chief Executive of ARK Invest, tells investors in a new video that she is sharing her pain, as leading ARK Innovation Fund ARKK,
-1.36%
Has fallen 45% since February. She said that ARK funds account for more than half of her individual retirement account and a “significant” portion of her net worth. “I want you to know that, of course, we have been through a very difficult time since the significant rotation in price from growth started about a year ago in mid-February, and I want you to know that That we are in. There with you, ”she said.

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It must be said, executives of companies he has invested in do not feel the same way. Company insiders sold $13.5 billion of stock in the innovation fund’s holdings in the six months to December, while buying just $11 million. financial Times Reported citing data from brokerage StoneX.

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While Wood is still a believer that COVID-19 is accelerating innovation, he isn’t a buyer of the rally in automotive stocks since the new year, including news from Ford doubling the rate of production of the electric version of the F-150 . “I look at the performance of stocks like [General Motors]
GM,
-0.95%
and Ford F,
-0.08%,
They got over those electric-vehicle announcements,” she said. “what rubbish.”

Shares of Ford have jumped 18% this year, Chrysler owner Stelantis STLA,
-2.06%
is up 9%, and GM has climbed 6%.

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Electric vehicles make up about 2% of their sales. “What if the other 98% or so are on their way out as consumer preference shifts to electricity,” she asked. It also cited depressed consumer sentiment, rising inventories of used cars and easing microchip shortages as signs that the decline in new vehicle sales that has yet to recover is not just a supply issue.

“What if we’re right and sales aren’t up 20%, maybe sales are flat year-over-year and that gets them to about 15 million units,” she said. “And they’re probably going to have to start cutting prices if we’re right on the used car market and the pricing there, which means they’re probably going to face some credit issues.”

In the 2008 recession, people chose to pay off their car loans rather than their mortgages because they needed to get their jobs. Wood said they can’t make the same choice this time around because of the existence of ride-sharing. “I wouldn’t be surprised if at least one company loses money next year, which would be the most unexpected.”

“Where are the crazy valuations? Are they in our stock, now that Zoom ZM,
-2.68%
33 or 35 times less of this year’s earnings? Or is it in an auto stock where losses can occur,” he asked.

Chart

Jason Furman, former chairman of the White House Council of Economic Advisors and now a professor at Harvard University’s John F. Kennedy School of Government, has put together this chart that shows how badly both economists and markets will beat inflation in 2021. found it wrong. Furman said american economic association panel The normal multiples suggest that fiscal and monetary stimulus were much higher than the economy’s potential. He expects inflation to remain “very high” because demand will be above trend, and a lag from Federal Reserve policy will mean any further tightening will have no effect until next year. He also said that supply will remain below trend.

buzz

Tennis star Novak Djokovic won a court ruling allowing him to remain in Australia, although he could still be deported.

Senior US and Russian officials began formal talks in Geneva aimed at resolving tensions with Russian troops stationed on the Ukrainian border.

The $1.8 trillion spending package that West Virginia Democrat Sen. Joe Manchin proposed to the White House is no longer on the table, according to the Washington Post.

Novartis NVS,
+1.16%
said it plans to file for Food and Drug Administration approval for a COVID-19 treatment, licensed from molecular partners MOLN,
-3.39%,
A 78% reduction in hospitalizations was seen after the Phase 2 trial.

Apparel Manufacturer Lululemon Athletica LULU,
-3.68%
Citing the impact of the Omicron coronavirus version on capacity and employees, it warned earnings and revenue would be at the low end of its target.

Market

Markets looked calm with slight weakness for US Stock Futures ES00,
-0.10%

NQ 00,
-0.30%,
According to FactSet, growth stocks last week underperformed the most value stocks since election week 2020 due to concerns over Fed tightening.

Yield on 10 Year Treasury TMUBMUSD10Y,
1.771%
was 1.78%.

top ticker

Here were the most active stock-market tickers on Businesshala, at 6 a.m. Eastern.

anchor

security name

TSLA,
-3.54%

Tesla

GME,
+7.32%

GameStop

AMC,
+2.36%

AMC Entertainment

NIO,
-0.03%

NIO

AAPL,
+0.10%

Apple

ocgn,
-1.69%

ocugen

NVDA,
-3.30%

NVIDIA

Dad,
+2.51%

Alibaba

TLRE,
-0.31%

Tilray

NVX,
+4.28%

novavax

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