Cathie Wood of Ark Invest thinks we may be heading for a commodities crash – fr

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Cathie Wood of Ark Invest thinks we may be heading for a commodities crash – fr


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(Kitco News) – Cathie Wood of Ark Invest said she believes the commodities boom will abate quickly once economies reopen. We have currently seen bullish moves in areas such as timber, copper, oil and more as manufacturers and producers source products as we enter a period of growth as the world is starting to emerge from the COVID-19 pandemic.

Wood said that “the rush is bigger today than we’ve seen in any other cycle,” predicting that “we’ll have a very serious correction in commodity prices” once the global economy fully reopens.

“Many see what has happened over the past 3 months as the equivalent of the tech and telecommunications crisis. We don’t think it’s the least bit, ”she said.

The theory is that deflation, rather than inflation, is likely to be the dominant theme in global markets for years to come due to technological innovation, Wood said. Benchmark 10-year Treasury yields will likely stay in the 1.5% to 3% range, she said, while oil prices are unlikely to exceed $ 70 a barrel.

Looking to the future and how to position herself, she said, while the rotation of investors in value stocks has been “powerful”, high growth stocks remain attractive.

“Many see what has happened over the past 3 months as the equivalent of the tech and telecommunications crisis. We don’t think it’s the least bit, ”she said.

Wood, however, believes growth stocks such as Tesla Inc will continue to outperform over the next 5 years despite their recent declines. Noting “If I loved it up there and it’s 35% cheaper, it must be a good deal,” she said.

Below is the daily copper chart and you can see that the price rise since 2020 has been pretty epic. At its lowest point in 2020, the price of copper futures reached $ 1.97 / lb and today the price hit $ 4.82 / lb, an increase of 143%.

Warning: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. This is not a solicitation to exchange commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for any loss and / or damage resulting from the use of this publication.

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