What we’re reading (1/6)
“Cathie Wood’s Flagship Ark ETF Off To A Rough Start In 2022 — Down 45% From Its Peak” (Yahoo!Finance). “With every new year comes a clean slate. For Cathie Wood’s Ark Invest, that doesn’t seem to be the case. The firm’s beaten-down Ark Innovation Fund has hit a new low in 2022 — already. After shedding 7% in Wednesday’s sell-off, the fund is down 9% this week so far and 45% from its peak in February 2021, with the decline marking its worst drawdown since inception in 2014.”
“Mortgage Rates Hit Highest Levels Since Spring 2020” (Wall Street Journal). “Ultralow interest rates have been a major force in the housing boom of the last two years. Households that kept their jobs and saved money during the pandemic seized on low borrowing costs to buy bigger homes that could accommodate working or schooling from home. Second-home purchases and investor demand for rental properties also surged.”
“Crypto Sell-Off Fuelled By Fed Worries Wipes Out Almost $900m Of Bets” (Financial Times). “Bitcoin traders suffered their worst day in a month after turbulence in traditional markets spilled into digital asset trading and caused almost $900m worth of bets to turn sour. The liquidations that hit leveraged traders come after the US Federal Reserve signalled that it could tighten monetary sooner than many investors had expected to combat rising inflation. The prospect of rising interest rates has caused prices to tumble in equity markets and pushed yields higher on government bonds.”
“Hedge Funds Are Selling Tech Shares At Their Fastest Pace In A Decade As Rates Spike” (CNBC). “The hedge fund community dumped tech stocks in the four sessions between Dec. 30 and Tuesday as interest rates spiked. The four-session tech unloading marked the biggest sale in dollar terms in more than 10 years, reaching a record since Goldman Sachs’ prime brokerage started tracking the data.”
“A Fed Official’s 2020 Trade Drew Outcry. It Went Further Than First Disclosed.” (New York Times). “Corrected disclosures show that Vice Chair Richard H. Clarida sold a stock fund, then swiftly repurchased it before a big Fed announcement…’It undermines the claim that this was portfolio rebalancing,’ said Peter Conti-Brown, a Fed historian at the University of Pennsylvania. ‘This is deeply problematic.’”
