As the inflation data showed some relief, innovation stocks rallied hard pushing up the ARKK Innovation ETF to its biggest single-day gains.
On Thursday, November 10, all three indices on Wall street witnessed a solid recovery with the tech-heavy Nasdaq Composite seeing a 7% jump. It was also one of the best days of Cathie Wood’s flagship ARK Innovation ETF which invests in new-age innovation companies.
With $6.9 billion in assets under management, the exchange-traded fund jumped a staggering 14% witnessing its biggest daily pop since its inception in 2014. ARKK’s biggest holding Zoom Video Communications (NASDAQ: ZM) jumped by a massive 14.46% closing at $82.23.
Its other biggest holding Tesla Inc (NASDAQ: TSLA) also jumped by 7%. Also, shares of Roku and Teladoc jumped 15% each. Some of the other holdings of ARK Innovation ETF such as Unity, Pacific Biosciences, and Invitae, all traded up by more than 20%.
A staggering 48 million ARKK shares changed hands on Thursday. The 30-day average trading volume of ARKK shares has now moved past 25 million.
Cathie Wood’s Ark Innovation ETF
During the mega bull run last year in 2021, the ARK Innovation ETF by Cathie Wood was doing exceptionally well and was one of the top-performing ETFs in the market. However, amid the monetary tightening scenario this year, disruptive companies have been severely hit hard making them unappealing.
However, if the Federal Reserve decided to dial back on its tightening measures, these stocks could potentially see a major rebound. On Thursday, the inflation numbers came out to be lower than expected which was welcomed by the market with a roaring rally. All three top US indices on Wall Street rallied more than 5%.
Popular as an innovation investor, Cathe Wood has been speaking about deflation for a while. She said that the higher prices in consumer goods were an outcome of the temporary Covid-related supply issues. Earlier this week, Wood also said that her conviction in deflation has increased. Thursday’s CPI data also signal that the trend has been going in her favor.
During a webinar on Tuesday, Cathie Wood told investors that inflation will be influenced by firms slashing prices due to inventory access as we head into the holiday season.
Despite yesterday’s jump, Cathie Wood’s ARKK Innovation ETF is still down by 61% year-to-date. After the recent crash in her ETF portfolio, Cathie Wood has been doubling down on some of her top picks. This week, Wood has been buying heavily the shares of Zoom, Tesla, and Coinbase.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
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