OPINION: Cathie Wood sees deflation coming, but Ray Dalio has a very different view. He thinks higher rates could force stocks down another 20 per cent.
It’s pretty wild out there. Just a day after Wall Street plunged 4 per cent on shock US inflation data, the SP 500 clawed back a little ground, ending a volatile trading session on Wednesday night up 0.34 per cent.
Cathie Wood’s biggest purchases on Wednesday night were in tech stocks that have been smashed up in the environment of rising inflation and rising interest rates we’ve seen this year.According to Bloomberg, Ark went on its biggest single buying binge since February, scooping up 27 stocks across its eight exchange-traded funds.
“Right now, the markets are discounting inflation over the next 10 years of 2.6 per cent in the US. My guesstimate is that it will be around 4.5 per cent to 5 per cent long term, barring shocks and significantly higher with shocks.”Following that through, Dalio sees bond yields sitting at between 4.5 per cent and 6 per cent.
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