Ark Invest CEO Cathie Wood used her latest monthly market webinar Tuesday to reiterate her criticism of the financial community's focus on rising prices, stating bluntly: "We don't have an inflation problem."
In minimizing the threat from rising prices, the asset manager has gone against the popular consensus on inflation. To make her point, Wood highlighted two variables, productivity and the oil market.
Wood noted that recent unit labor cost data showed only a 0.3% increase in Q4. This moderate advance came as a result of productivity gains in the fourth quarter.
Wood argued that market watchers tend to undervalue you the impact of productivity gains on long-term inflation. She pointed to recent wage data that showed an approximately 5% rise in average hourly earnings. In her estimation, this figure is likely closer to a 3% increase in real terms, due to higher productivity for workers compared to last year.
Wood stated: "I think not taking into account productivity is going to cause a serious miscalculation in terms of what's going to happen to inflation."
The second variable is oil. Wood acknowledged the fact that crude had appreciated to a level above $90/bbl. However, she contended that this spike in prices become self-correcting, as it will invite supply back into the market, eventually balancing out the inflation equation.
In 2019 U.S. oil production peaked at 12.3M barrels per day according to Wood, making the country the largest energy producer globally. Wood mentioned that "it appears in 2022 we will be going up to roughly 12 million barrels per day and in 2023 up 12.6M barrels per day."
Below are Wood's six actively managed ETFs, along with their YTD performance:
ARK Innovation ETF (NYSEARCA:ARKK) -23.4%, ARK Fintech Innovation ETF (NYSEARCA:ARKF) -23.8%, ARK Autonomous Technology & Robotics ETF (BATS:ARKQ) -15.9%, ARK Next Generation Internet ETF (NYSEARCA:ARKW) -22.1%, ARK Genomic Revolution Multi-Sector ETF (BATS:ARKG) -19.9%, and ARK Space Exploration ETF (BATS:ARKX) -13.3%.
Furthermore, Wood intends to launch the ARK Venture Fund, which is aimed to provide exposure to less liquid markets through an unlisted closed-end fund.