In the know with Cathie Wood

Election Impact, Employment Numbers, Economic Indicators | ITK with Cathie Wood

https://youtu.be/BZsvqqTbgEA 

Sunny K Wu

@2:20 Think stimulus is coming.  

 

@3:30 Zombie companies.  

 

@3:52 M2 growing 25% y-o-y is good. Money going somewhere. Housing? Bond? Little entered into equity market. How much will flow into inflation? Lumber prices has tripled because of housing boom.

 

 @5:32 Asymmetric Fed policies. Fed will wait before adjusting rates even if they jump up past 2.5% to make up for past misses. Wage push inflation possibility. 

 

 @7:30 Will market's relapse? Don't think so. Creative disruption may occur in accelerated rate.  

 

@8:45 fixed income markets. 10 year treasury bond is flat in September and shorter end of curve too; no big change - positive. Good for Financial Services sector. FinServ is back to March Lows, but ARK thinks it's on cusp of disruption with Digital Wallet and FinTech. 

 

 @10:00 Higher and Lower quality bonds spread have moved out. BB and BBB spread have not dropped back to 150-200 basis point before COVID. 250 basis now, after high 355 basis points. Reversing back to 300. Credit default swaps deteriorating. Function of creative disruption. Internal Combustion Engine, any pharmas not adapting to AI, newer tech is in harms way. 

  

@12:20 Copper price dropped to $2/metric ton to $3 since March. Lumber moved from $300 to $1000 to meet demand. Housing is boom. Scramble to bring more housing to market. 

  

@13:38 Continuous outflows out of equities and ETF accelerate since January 18 of$370 B. Inflow to fixed income is $730 B since January 18. Fixed income has gone into overdrive and may have to follow strong growth statistics. 

 

 @16:00 Unemployment rate: Consensus 8.5, actual 7.9%. Nonfarm payrolls disappointed 860,000, actual 660,000. Private sector upside surprise. 850,000, actual 877,000. Government sector big cut.  

 

@17:55 Increased hours worked (multiplicative). Businesses scrambling to keep up with consumer demand.  

 

@18:30 Manufacturing jobs are on fiyah. 35k consensus, up 66k in September, over 29k previous month. Supports theory that consumer demand is high. Up 0.1% 4.7% y-o-y. Strong by historical standards.  

 

@19:19 consumer feeling good for current and future expectations. Durable goods orders (best indicator of capital spending) - nondefense capital goods exit aircraft. Up almost 2% month-to-month. Highest multiplier in GDP account.  

 

@20:30 Q3 GDP. Looks to be up 39% on annualized rate. Consumer sentiment is good indicator for consumer activity.  

 

@21:30 Consumer saving rate dropped from 17.5% to 14%. On average is 8% before COVID. 

Movement from 14 to 8% could mean significant strength for consumer buying. 

 

@22:30 Election. Innovation in 5 main platforms, 14 technologies have hit escape velocity and will continue to plow forward. Trump presidency - have idea what will happen. Lower taxes of all kinds - proposed. More deregulation. Biden administration - higher tax rates of all kinds. Unwinding of deregulation or more regulations. May hurt future innovation and add more momentum to technologies that hit escape velocity. Corporations and consumers have to look at ways to save costs if taxes are going up. Not sure with Biden admin. 26:40 CW will continue to advocate for better paying jobs, and innovation.