Ark Invest CEO Cathie Wood has been quieter than usual on social media as of late, but on the evening of Oct. 26, she disclosed via her X account that she's been watching an economical trend that isn't being properly spelled out in government statistics: just how weak the economy is.
"Government statistics do not seem to be capturing how weak the economy is. Many companies are reporting shockingly weak revenues. UPS's (UPS) -) U.S. delivery volume growth is worse today than in 2007-2009. After falling for nearly two years, it dropped another -11% last quarter," she said.
Related: Cathie Wood Calls Out the Nasdaq
Wood goes on in the thread to explain her reasoning, pointing out that 3M (MMM) -), a company she refers to as an "economic bellwether," saw a 3% drop in global organic sales year-over-year on a local currency basis last quarter, leading her to espouse that the services side of the economy is "unlikely to escape the global monetary tightening that is gripping these companies."
At first I thought that Amazon still was taking share and causing problems, but this chart suggests that market share has changed very little since 2020. pic.twitter.com/Q2Jh6RiFjO
— Cathie Wood (@CathieDWood) October 26, 2023
Wood also points out that U.S. employment is still strong, which supports the government's point of view. But Ark Invest's take is a much darker one, as the savvy investor goes on to explain.
…if we are right that prices are about to unravel and crush margins, then companies will be forced not only to lay off excess labor but also to harness AI and other automation to salvage margins. Innovation solves problems and gains traction during tough times!
— Cathie Wood (@CathieDWood) October 26, 2023
Tesla CEO Elon Musk, who is wrestling with some bigger problems with his EV darling these days, commented on the thread, clearly interested in Wood's point of view.
Interesting
— Elon Musk (@elonmusk) October 27, 2023
It's no surprise to hear Wood mention AI and automation in a positive light, as her top investment in Ark's portfolio has been Tesla for quite some time (so it's no wonder Musk is hanging out in her X threads).
But some of her recent moves don't quite line up with her bullish stance on the sector — she's been dumping both Tesla and Nvidia (NVDA) -) stock left and right lately, although she let Nvidia go before its now-historic Q1 earnings.
But perhaps most telling of all is that despite Wood's constant vocal support for Tesla, especially its full self-driving technology, she's sold off hundreds of thousands of Tesla shares since the summer, bringing the holding below 10% for the first time in a while.
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