Cathie Wood, the CEO and CIO of ARK Invest, raised a cautionary note on Friday about the state of the U.S. economy and warned that it’s weaker than it appears. Wood pointed to recent earnings results and similar cautious statements from corporate executives.
Indeed, her statement mirrors that of Jamie Dimon – JPMorgan’s (NYSE:JPM) CEO – who asked stakeholders to ignore economic data. Wood predicted a sharp rise in layoffs and a possible increase in AI-related investment. She said this would happen as companies attempt to protect margins.
In a recent tweet, Wood said that government data do not appear to accurately reflect the state of the economy. To back up her claim, she asked people to turn to the recent earnings results, which, in her words, show “shockingly weak revenues.”
The innovation-focused investor also said that despite the weak state of the economy, the U.S. employment data came back strong, backing up the government’s claims. “In our view, labor hoarding after two years of vacancies is a reason on the demand side, while loss of purchasing power–especially food and energy–is a reason on the supply side.”
Wood emphasized further that economic pressures would soon force companies to take the difficult route. She noted that prices were poised to “unravel and crush margins,” driving employers to lay off excess labor.
However, she stated that the pressures could lead to a boom in innovation-focused tech firms. She predicts that corporations would look to artificial intelligence and other forms of automation to save profits. According to the CEO, innovation solves problems and gains traction during difficult times.
Which ARK Invest ETF is the Best to Invest In?
Turning to Wall Street, ARKG ETF remains the leader in upside potential here, as it offers 129.86% against its average price target of $51.33. Meanwhile, with an average price target of $68.65, ARKW is the laggard, at 37.2% upside potential.
