Cathie Wood: The market is misjudging the inflation trend, inflation data may come in lower than market expectations

BlockBeats News, January 18, ARK Invest founder Cathie Wood stated, "Our experience over the past few years tells us that the trend of declining inflation is already very clear. However, in the official reported data, inflation appears to have stagnated. Many people are wondering, with current market valuations approaching historical highs, whether this looks like a prelude to a correction. Looking back at history, during the 1990s until around 1997, as well as the early 2000s, the market still experienced very strong growth even as valuation multiples declined. We must assume that valuations will be compressed, and when conducting bottom-up analysis of each company, we incorporate the assumption of valuation compression."

Nevertheless, we remain quite optimistic about the inflation outlook, mainly for the following reasons: firstly, oil prices; secondly, housing prices. You can see that homebuilder KB Home has reduced home prices by 7%, and other companies are following suit. In addition, productivity has improved significantly, and unit labor costs are dropping sharply. Therefore, there are currently multiple deflationary pressures. The last factor I want to mention is technology.

Our focus is entirely on technology-driven innovation, covering robotics, energy storage, artificial intelligence (especially), blockchain technology, and multi-omics sequencing in healthcare. We believe that inflation data is very likely to come in below market expectations."