Stock Market Cafe
  • Home
  • Trading News
  • Email Whitelisting
  • Privacy Policy
  • Home
  • Trading News
  • Email Whitelisting
  • Privacy Policy
No Result
View All Result
Stock Market Cafe
No Result
View All Result
Home Trading News

Sell-off in Cathie Wood’s ARK Innovation fund reached 48% at low point Thursday

by
January 6, 2022
in Trading News
0
0
SHARES
0
VIEWS
Share on FacebookShare on Twitter

RELATED POSTS

These major economies are headed into recession in the next 12 months, Nomura says

More parts of China battle Covid and threats of lockdown as cases spike again

Catherine Wood, chief executive officer of ARK Investment Management LLC, speaks during the Milken Institute Global Conference in Beverly Hills, California, on Monday, Oct. 18, 2021.
Kyle Grillot | Bloomberg | Getty Images

Cathie Wood’s flagship fund ARK Innovation is caught in the epicenter of tech selling this week and some analysts see the stocks behind her strategies dropping even further before bottoming.

At its low of the day on Thursday, the innovation-focused exchanged-traded fund was down more than 48% from its February 2021 all-time intraday high. That is a drop worse than the one the fund saw in March of 2020 during the low of the pandemic market rout.

ARK Innovation was last flat on the day.

Ark Innovation (ARKK) intraday peak to trough
FactSet

“This is worse than March of 2020 for that segment of the market,” said Josh Brown, co-founder and CEO of Ritholtz Wealth Management, on CNBC’s “Halftime Report.” “That is remarkable to me.”

The selling this week, which had spurred a 9% drop in the ETF this week, is largely due to a spike in interest rates. Higher rates typically punishes growth pockets of the market that rely on low rates to borrow for investing in innovation. And their future earnings look less attractive when rates are on the rise.

The 10-year Treasury yield rose as high as 1.75% on Thursday, as rates have spiked to start the year with the Federal Reserve signaling a faster-than-expected policy tightening this year.

“I still don’t believe the Cathie Wood stocks are low enough,” said Stephen Weiss, chief investment officer and managing partner of Short Hills Capital Partners, on CNBC’s “Halftime Report.” “There’s going to be continued pressure.”

“Inflation is here. I think the Fed is going to be aggressive. The Fed wants you out of risk assets,” he added.

Of the 43 holdings in ARK Innovation, 36 are more than 40% off their 52-week highs. Tesla, Roku, Teladoc Health and Zoom Video are some of ARK Innovation’s top holdings.

“The performance of Cathie Woods ARKK is so atrocious that even though it is not a hedge fund and it can’t be shot against, it is a pall over every holding. Tempting to discuss opportunities but hard to find… It’s such a tough streak…,” CNBC’s Jim Cramer said on Twitter on Thursday.

This week’s underperformance spurred more than $280 million in fund flows to exit Wood’s flagship ETF since Monday, according to FactSet.

ARK Innovation’s tumultuous start to 2022 follows a rough year for ARK Innovation, which fell 24% in 2021.

The depreciation in Wood’s stocks from mid-February of 2021 has not changed Ark’s forecast, however. Wood said she is just getting her highest-conviction stocks at lower prices. This should result in a quadrupling over the next five years, she has said.

Wood has continued to buy the dip in her favorite stocks this week. She scooped up shares of DraftKings, Block and Roblox.

ShareTweetPin

Related Posts

These major economies are headed into recession in the next 12 months, Nomura says

by
July 5, 2022
0

Thomas Calomiris, a third generation produce vendor, weighs an onion at Eastern Market as the US struggles with rising inflation...

More parts of China battle Covid and threats of lockdown as cases spike again

by
July 5, 2022
0

Covid-related restrictions tightened in parts of China as local cases climbed, while lighter measures such as virus testing linger on...

Natural Gas Soars 700%, Becoming Driving Force in the New Cold War

by
July 5, 2022
0

Quartz India’s reluctance to raise fuel prices has created a major domestic shortage The Indian government has cut excise duty...

The second-half is ‘not looking good’: Strategists on how to weather the market storm

by
July 5, 2022
0

A trader works on the floor of the New York Stock Exchange (NYSE), June 27, 2022. Brendan McDermid | Reuters...

Tesla Pauses Plants After Ending Shaky Quarter With a Production Milestone

by
July 5, 2022
0

Bloomberg US Recession Isn’t Goldman’s Base Case, Macro Strategist Says (Bloomberg) -- The base-case expectation isn’t for a recession in...

Next Post

UnitedHealth's stock selloff chopping about 120 points off the Dow's price

Nasdaq falls for a third day as tech stocks struggle, Dow loses more than 150 points

Leave a Reply Cancel reply

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

email

Get the daily email about stock.

Please Enter Your Email Address:

By opting in you agree to our Privacy Policy. You also agree to receive emails from us and our affiliates. Remember that you can opt-out any time, we hate spam too!

MOST VIEWED

  • Crocs sees fourth-quarter sales up 42%, CEO Andrew Rees says 2021 was ‘exceptional year’

    0 shares
    Share 0 Tweet 0
  • Buying a car from the factory sounds expensive, but it can actually save you money. Here’s how to do it.

    0 shares
    Share 0 Tweet 0
  • Roth TSP vs. Roth IRA: How Do They Compare?

    0 shares
    Share 0 Tweet 0
  • The states that won’t tax military retirement in 2022

    0 shares
    Share 0 Tweet 0
  • Allbirds stock has plunged 50% in two months, now one top analyst says buy it

    0 shares
    Share 0 Tweet 0
  • Home
  • Trading News
  • Email Whitelisting
  • Privacy Policy
All rights reserved by www.stockmarket-cafe.com
No Result
View All Result
  • Home
  • Trading News
  • Email Whitelisting
  • Privacy Policy

All rights reserved by www.stockmarket-cafe.com