Ark Invest’s Cathie Wood on Sunday expressed her positive outlook for the stock market under President-elect Donald Trump‘s administration.
What Happened: During a recent appearance on CNN’s Inside Politics Sunday, Wood was asked about her projections for the stock market under the Trump administration, particularly in relation to major investments such as Tesla Inc. TSLA and Bitcoin BTC/USD.
Wood shared her belief that the market is already starting to anticipate a shift. “I think that the stock market already is starting to discount a change. If you look at what happened in the last four years, we saw massive concentration towards very few stocks,” she said.
“I think the market’s going to broaden out right now. And reward companies who are at the leading edge of innovation, not those — just those who have already been very successful.” This shift, she believes, will benefit small and medium businesses.
Wood also emphasized the underestimated impact on low- and middle-income earners, suggesting that this will contribute to a more diverse distribution of the stock market’s gains. While maintaining a positive outlook, Wood cautioned that the market’s growth will not be linear.
“Of course, nothing goes up in a straight line. I don’t want to pretend that but we’re quite positive about the outlook for the next few years,” Wood said.
Why It Matters: Wood’s predictions align with her previous statements about the potential impact of a Trump administration on the market.
In a recent investor webinar, she expressed optimism about the future direction of the market under Trump, suggesting that a second term for the former president could open up the IPO market and provide liquidity events for venture funds.
Wood also highlighted the potential for regulatory clarity in the fintech sector, particularly for Bitcoin, under the Trump administration. These insights suggest that Wood’s predictions for the stock market under Trump are based on a broader perspective of the potential changes in the market’s dynamics.
Meanwhile, Wood also shed light on the potential repercussions of a possible fallout between President-elect Trump and Musk on the billionaire-led companies, Tesla and SpaceX. She emphasized that both Trump and Musk possess strong personalities, a trait that has played a significant role in their respective successes.
Price Action: Despite a few dips, the equity markets have been trading higher than the pre-election levels after President-elect Trump's victory.
The Dow Jones gained 1.6% last week, recording a gain of 7.5% for November. The S&P 500, reflected in the SPDR S&P 500 ETF Trust SPY, gained 1% last week, surging by 5.6% last month. The Dow and S&P 500 recorded their best months of the year, according to data from Benzinga Pro.
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