What just happened?
What a difference a year makes. One year ago Wednesday markets began to teeter, after suddenly coming to the realization that COVID-19 couldn’t be confined — or ignored — any longer.
Markets in multiple asset classes seized up, case counts and deaths began to rocket higher, and millions of frightened Americans suddenly found themselves hunkered down at home, unemployed, or grieving.
Now we’re charting fresh highs nearly every day, celebrating the onset of new technological paradigms, and even — despite great skepticism from ETF Wrap — possibly even seeing the first stirrings of a reflationary cycle in over a decade.
We’ll continue to do our best to help you use ETFs to ride the rotation, if not the spin session.
Thanks for reading, as always.
Laws of gravity aside, it seems like anyone who becomes a market media darling faces an extra layer of scrutiny when the tide looks like it’s starting to turn.
Cathie Wood’s ARK Invest, which last year rode the lockdown-fueled tech wave to triple-digit returns and inflows in the tens of billions , has had some down days in recent weeks.
Some Twitterati and analysts are taking note. Wood is well known for her bets on Tesla /zigman2/quotes/203558040/composite TSLA -0.91% , including a whopper of a price target , and on Bitcoin /zigman2/quotes/31322028/realtime BTCUSD +1.61% . In December 2019 she told MarketWatch in a sit-down interview , “In my own IRA, I have only our funds and [Grayscale Bitcoin Trust, a cryptocurrency fund] /zigman2/quotes/203330852/delayed GBTC +0.52% .”
Tesla shares have dropped roughly 16% since the company disclosed a sizable investment in Bitcoin in early February.
This week, Saxo Bank’s head of equity strategy, Peter Garnry, who has been warning clients that Tesla is tangled up in a risky threesome with bitcoin and ARK, reiterated his concerns .
Tesla “is also the biggest position across all ARK Invest ETFs, which added pressure to its biggest fund the (ARK Innovation ETF) /zigman2/quotes/204808965/composite ARKK +0.59% losing 6% yesterday. This is exactly the risk cluster that we have been worrying about and wrote about two weeks ago,” Garnry said.
On Wednesday, a popular trading Twitter account said much the same thing.
It’s worth noting that Wood’s team trades very actively — maybe even aggressively — as she described to MarketWatch in June , and has set an ETF industry standard for disclosing not just positions, but trades. What’s more, Wood has been in financial services for decades, and is likely to have robust risk management protocols in place that aren’t as public.
Depending on your view, the mid-week tech rebound may quiet the peanut gallery –– or buy Wood some breathing space.