The best fund manager of 2020 warns more than half of the S&P 500 runs the risk of technological revolution

By the end of 2020, it will be difficult to find a more successful fund manager than Cathie Wood, CEO and Chief Investment Officer of ARK Invest.

ARK’s flagship fund, the ARK Innovation ETF ARKK,
+ 2.24%,
jumped 154% this year, bringing the 43% increase for the Nasdaq Composite COMP,
+ 0.15%,
and other ARK funds, including the ARK Genomic Revolution ETF ARKG,
+ 2.03%
also had meteoric gains. The only real acid note came this week, with both losses in the funds and unique outflows. According to FactSet Research, the innovation fund raised $ 9.4 billion this year, the genomic fund raised $ 5 billion in assets and its next-generation internet fund ARKW,
+ 1.74%
attracted nearly $ 3 billion in cash flow.

In a comment to clients this week, Wood said there are five “innovation platforms” in which companies need to invest, or lose their way: DNA sequencing, robotics, energy storage, artificial intelligence and blockchain technology. These platforms involve 14 technologies, including gene therapies, 3D printing, cloud computing, big data analytics and cryptocurrencies, she said.

This technological innovation jeopardizes many industries – energy, industry, discretionary consumer, communications services, healthcare and financial services, which make up more than half of the S&P 500 SPX.
+ 0.13%,
she said.

Traditional benchmarks for equities and fixed income are increasingly populated by so-called value falls, equities and bonds that are ‘cheap’ for a reason, she added.

There is an economic forecast attached to this revolution. “If our forecasts for the five innovation platforms are close to the point, nominal GDP growth in the US is likely to slow from 4.1% at an annual rate over the past five years to 2-3%, and only new technologies again. and get solutions. get enough critical mass to move the economic needle, ”she said. Volume growth and inflation will increase on the low side of expectations.

The buzz

Senate Majority Leader Mitch McConnell has said he will not vote on $ 2,000 stimulus checks unless it bans provisions that include legal protection for businesses, including Google owner Alphabet GOOG. .
a social media platform Facebook FB,
as well as setting up a commission to look into President Donald Trump’s unfounded allegations of electoral fraud.

Betting markets continue to favor Republicans, while the latest polls in Georgia tend toward Democrats taking both the Senate run-off seats, giving the party control of both chambers of Congress as well as the president.

Attention to the front of the coronavirus is still on the slow rollout of vaccines in the US, just as much as the increasing toll the virus is demanding. According to the COVID-19 detection project, daily hospitalizations reached 125,220, as deaths amounted to 3,903, while the Centers for Disease Control and Prevention reported that 2.8 million had begun the vaccination process. China approved its first state-owned conglomerate Sinopharm 1099.
+ 3.40%,
which states that it is 79% effective, while the US may not approve the vaccine from the pharmaceutical company AstraZeneca AZN,
+ 0.56%
according to April, according to a top Trump administration health official.

The oil producer Exxon Mobil XOM,
+ 0.80%
said in a statement from the Securities and Exchange Commission that it plans to write off as much as $ 20 billion in the fourth quarter.

Hedge fund Alden Global has made a non-binding offer to buy the shares it does not yet own in Tribune Publishing TPCO.
+ 0.31%
for $ 14.25 per share. Tribune closed at $ 12.79 on Wednesday.

Enphase Energy ENPH,
+ 1.60%
will replace Tiffany, which is acquired in the S&P 500 index, S&P Dow Jones Indices announced.

The US has said it will subject the European Union to additional tariffs on aircraft parts from France and Germany, non-sparkling wine from France and Germany, and cognac, which it said was a reaction to the EU’s calculation of US tariffs. implement. The broader, long-running dispute is over state aid to aircraft manufacturers Boeing BA,
+ 0.19%
and Airbus AIR,

Weekly unemployment claims are the last economic indicator to be released in 2020.

The graph

Ronnie Walker, an economist at Goldman Sachs, finds that the labor market has not changed much, for better or worse, since the November work report. The good news is that the COVID-19 pandemic did not have many scars. Two-thirds of the 25 million jobs initially lost since the start of the pandemic have returned, and 42% of newly unemployed people since February say they have been temporarily laid off, he said.

The market

It looks like a quiet finish to a big year, with little movement in ES00 stock futures,
+ 0.06%,
effects TMUBMUSD10Y,
or the dollar DXY,
Bitcoin BTCUSD,
+ 0.18%
was where the action was, with the cryptocurrency amounting to $ 29,000.

Random reading

Becky Hammon became the first woman to appoint a team in the history of the National Basketball Association and took over the San Antonio Spurs on Wednesday night after Gregg Popovich’s expulsion in the first half.

The father of British Prime Minister Boris Johnson has said he is applying for French citizenship.

American rivers change color, satellite images show.

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