Latest News

Cathie Wood just called out the Fed’s biggest blind spot and warns of significant ‘price deflation in the pipeline’ — here are the top 3 stocks she likes right now

0

S&P Futures

3,703.75

-28.25(-0.76%)

Dow Futures

29,553.00

-197.00(-0.66%)

Nasdaq Futures

11,443.50

-112.25(-0.97%)

Russell 2000 Futures

1,706.20

-14.60(-0.85%)

Crude Oil

82.37

+0.22(+0.27%)

Gold

1,655.60

-14.40(-0.86%)

Silver

18.65

-0.23(-1.24%)

EUR/USD

0.9686

-0.0053(-0.54%)

10-Yr Bond

3.7050

0.0000(0.00%)

Vix

31.46

-1.14(-3.50%)

GBP/USD

1.0860

-0.0025(-0.23%)

USD/JPY

144.7300

+0.6080(+0.42%)

BTC-USD

19,461.93

+742.15(+3.96%)

CMC Crypto 200

444.56

+15.78(+3.68%)

FTSE 100

6,928.66

-76.73(-1.10%)

Nikkei 225

26,422.05

+248.07(+0.95%)

Cathie Wood just called out the Fed’s biggest blind spot and warns of significant ‘price deflation in the pipeline’ — here are the top 3 stocks she likes right now

It’s no secret that the Federal Reserve is committed to getting inflation back under control.

The central bank raised its benchmark interest rates by 75 basis points last week, marking the third such hike in a row.The central bank raised its benchmark interest rates by 75 basis points last week, marking the third such hike in a row.

Ark Invest’s Cathie Wood points out the potential problem of the Fed’s hawkish stance.

“None of those voting on the Federal Reserve is focused on the significant price deflation in the pipeline,” she tweeted last week. “The Fed seems to be making decisions based on lagging indicators and analogies.”

Don’t miss

Here’s how to get Walmart and Kroger to pay YOU inflation-protected income on a quarterly basis

These top 5 housing markets are expected to crash first — do you live in one of these fast-growing cities?

What do Ashton Kutcher and a Nobel Prize-winning economist have in common? An investing app that turns spare change into a diversified portfolio

The super investor also points to the inversion of the yield curve, which can be a leading indicator of an impending recession.

It’s a scary picture, especially since the economy isn’t firing on all cylinders. Real GDP in the U.S. for both Q1 and Q2 showed contractions.

But Wood is sticking to her guns. Here’s a look at the top holdings at her flagship fund Ark Innovation ETF (ARKK).

Tesla (TSLA)

The electric vehicle maker is currently the largest holding at ARKK, accounting for 10.7% of the fund’s weight.

The stock delivered astronomical gains in 2020 and most of 2021, but has pulled back substantially in 2022.

Year to date, Tesla shares are down nearly 30%.

But business remains on the right track. In Q2, deliveries of the Model S, Model X, Model 3 and Model Y totaled 254,695 vehicles, up 27% year over year.

Ark Invest also sees a game-changing product coming for the company — robotaxi.

“Tesla’s prospective robotaxi business line is a key driver, contributing 60% of expected value and more than half of expected EBITDA in 2026,” wrote Ark analyst Tasha Keeney in a report in April.

In that report, Ark expects a share price of $4,600 (pre-split) for Tesla by 2026. On a split-adjusted basis, that represents a potential upside of around 450% from where the stock sits today.

Don’t miss the latest news and a steady flow of actionable ideas from Wall Street’s top firms. Sign up now for MoneyWise Investing for free.

Zoom Video Communications (ZM)

When meetings and classes moved online due to the pandemic, Zoom’s business flourished.

But as the economy reopened and employees started going back to the office, there have been concerns about the growth potential of this video communications company.

In 2022, Zoom shares have fallen a staggering 60%.

But Wood continues to see opportunity in the stock. In fact, Zoom is currently the second-largest holding at ARKK, accounting for 8.4% of the fund’s weight.

In June, Ark Invest released a research report showing how Zoom shares could see a glorious revival in the not-too-distant future.

“According to ARK’s open-source research and model, Zoom’s share price could approach $1,500, compounding at a 76% annual growth rate, in 2026,” Wood’s team wrote.

Since Zoom shares trade at around $73 a piece right now, that price target implies a potential upside of over 1,900%.

Roku (ROKU)

The secular trend of on-demand video streaming has created several winners in the tech space.

Roku is one of them. Since going public in September 2017, the stock has returned more than 120%.

The company’s platform gives users access to streaming services such as Youtube, Netflix and Disney+. Roku also offers its own ad-supported channels featuring licensed third-party content.

The company added 1.8 million active accounts in Q2, bringing its total active accounts to 63.1 million. Revenue rose 18% year-over-year to $764 million.

Although Roku’s business is growing, investors have been bailing in rapid fashion. The stock is down a staggering 82% over the past 12 months.

But Ark Invest is not giving up on Roku. In fact, Roku remains the third-largest holding at ARKK, accounting for 7.0% of the fund’s weight.

What to read next

If you want to be rich, use these 3 Warren Buffett techniques no one ever talks about

Billionaire Carl Icahn warns the ‘worst is yet to come’ — but when an audience member asked him for stock picks, he offered these 2 ‘cheap and viable’ names

Do you fall in America’s lower, middle, or upper class? How your income stacks up

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Advertisement

TipRanks

These 2 Stocks Are ‘Oversold Gems’ With Over 100% Upside Potential, Says Roth Capital

Barring selected periods of relief, the inherent trend of the stock market has been resolutely negative in 2022. For investors searching for ways to boost the portfolio’s performance, there have generally been slim pickings. But if you look on the bright side of a market situation where stocks are continuously pushed further down, what you get are some low and enticing entry points. Roth Capital’s tech and communications expert Scott Searle certainly thinks that with a bit of digging, investors

Reuters

Buffett’s Berkshire Hathaway buys 5.99 million more Occidental shares

Warren Buffett’s Berkshire Hathaway Inc bought another 5.99 million shares of Occidental Petroleum Corp, boosting its stake to 20.9% after the oil company’s shares lost about a fifth of their value in less than a month. The purchases were made between Sept. 26 and Sept. 28 and cost about $352 million, Berkshire said in a regulatory filing on Wednesday. Following the purchases, Berkshire now owns about 194.4 million Occidental shares worth approximately $11.9 billion, based on Occidental’s Wednesday closing price of $61.41.

TipRanks

Blackrock Says These Are the Best Sectors to Invest in During Inflationary Times

Earlier this week, the Dow Jones joined the S&P 500 and the NASDAQ in bear market territory. It marks the first time this year that the Dow has dipped below a 20% loss from peak – but it also marks a turning point in investor sentiment. A mood of doom and gloom is setting in. A change in times and a change in mood requires a change in outlook, a shift in perspective, for investors to succeed. With all three main indexes so far down, it’s clear that the last year’s modes of trading aren’t going t

Yahoo Finance

Apple’s falling iPhone demand isn’t as bad as it sounds

Apple is pulling away from iPhone 14 production, retreating from plans to increase manufacturing by 6 million units, according to a report by Bloomberg.

Reuters

Fed to take rates higher than previously expected; more pain ahead

BENGALURU (Reuters) -The Federal Reserve will hike its key interest rate to a much higher peak than predicted two weeks ago and the risks are skewed towards an even higher terminal rate, according to economists polled by Reuters. That change in expectations came after the Fed raised rates by 75 basis points last week for the third straight meeting and foresaw going higher than it had previously thought to tame inflation, which is running over four times above target. Since then, already battered global stocks went much deeper into bear market territory – a decline of 20% or more – on fears of recession and most currencies weakened further against the multi-decade high dollar.

Bloomberg

Wall Street Says Ignore the Treasury Rally. Fed Hikes Won’t Stop

(Bloomberg) — Some big bond investors say don’t be deceived by the Treasury market’s torrid rally Wednesday. Most Read from BloombergApple Ditches iPhone Production Increase After Demand FaltersMacKenzie Scott Files for Divorce From Science Teacher HusbandGermany Suspects Sabotage Hit Russia’s Nord Stream PipelinesNord Stream Gas Leaks May Be a New Disaster for the ClimateS&P 500 Roars Back From Six-Day Slide; Bonds Surge: Markets WrapThe hawkish signals still coming out of the Federal Reserve

Reuters

Analysis-Weak yen pulling Japan away from BOJ Kuroda’s radicalism

A decade ago, Bank of Japan Governor Haruhiko Kuroda won praise for ending a debilitating spike in the yen with his “bazooka” stimulus. True to his dovish streak, Kuroda told a briefing last week the BOJ’s guidance to keep policy rates at “current or lower levels” won’t change for about two to three years – well beyond the end of his second, five-year term in April. The remark triggered a sharp yen fall to near 146 to the dollar, from around 144, forcing the government to intervene to prop up the currency for the first time in 24 years.

Reuters

Britain’s market rout stokes contagion fears around the globe

The scale and speed of the sell-off in British assets has jolted world markets, raising concern about contagion as chaos in a major developed economy adds to unease already generated by sharp interest rate rises from the United States and elsewhere. Following Friday’s UK mini-budget, which flagged 45 billion pounds’ ($48 billion) worth of unfunded tax cuts, sterling tumbled to record lows while British bond prices slid. Markets had already been unnerved by an energy shock that has fuelled inflation and a strong dollar that is creating headwinds globally and which prompted a rare Bank of Japan intervention in currency markets just last week.

Reuters

Fed’s Evans: expect to reach top Fed policy rate by March

The Federal Reserve is raising interest rates expeditiously to address very high, persistent inflation, and will likely get U.S. short-term borrowing costs to where they need to be by early next year, Federal Reserve Bank of Chicago President Charles Evans said Wednesday. Most Fed policymakers are penciling in a top Fed policy rate of 4.5% to 4.75% by end of next year, based on their projections published last week, and “by March we will be at that point,” Evans said at an event on current economic conditions hosted by the London School of Economics. Benchmark U.S. 10-year Treasury yields rose to their highest level in about 12-1/2 years on Tuesday as investors girded for higher interest rates that could possibly remain for longer than anticipated as Federal Reserve officials held firm in their hawkish stance.

How much money do I need to live entirely off dividends? Here is the lowest amount you can probably get away with

Previous article

Wall Street hit with $1.8 billion in fines over staffers texting on personal devices

Next article

You may also like

Comments

Leave a reply

Your email address will not be published. Required fields are marked *

More in Latest News