Cathie Wood: Ark Invest has already reached the bottom

The head of the Ark Invest group of investment funds, Cathie Wood, said that the US economy is already in recession, and there is a slowdown in the labor market. At the same time, Wood noted that her own company had already reached the bottom long before the rest of the market. 

Wood's statements were based on an analysis of reports on the income of companies operating social networks, such as Snap and Meta Platforms. The recession is caused in part by a sharp reduction in spending by advertisers on social platforms and excess inventory in the warehouses of retailers such as Walmart and Target.

It is worth noting that Cathie Wood's views contradict the official position of the US Federal Reserve, which does not recognize the existence of a recession in the country. Wood suggests that the American regulator will recognize the recession only when the facts show that it has already occurred. 

Ark Invest specialists first of all pay attention to the advance indicators, which confirm the opinion that the US economy will continue to weaken, and inflationary pressure will decrease. If you look at the number of initial applications for unemployment insurance, it has increased by 50% compared to its minimum. Which suggests that employment figures will continue to disappoint market participants in the future.

Moreover, gold prices peaked in 2020, which is an important indicator of inflation, and copper prices declined significantly, which indicates a slowdown in economic activity. All these factors, according to the investor, indicate a future decline in inflation, and even the appearance of some deflation.

Wood sees grounds for optimism in these forecasts: such conditions will help Ark Invest's flagship fund to recover significantly. However, the fund is currently at the bottom. Recall that today Ark Invest has fallen by about 70% compared to the maximum of February 2021.