Tesla-bitcoin-ARK Investment’s tight market net could cause investors trouble, warns strategist

Tuesday is shaping up to be a very difficult one for tech stocks, after a welcome sale to investors starting this week.

The Nasdaq Composite COMP,
– up 40% over the past 12 months – fell 2.5% Monday on concerns that bond yields could rise that these technical stocks would look expensive. When there is a so-called “risk-free” outcome of climbing, it is more difficult to justify seemingly high equity valuations.

Leading lower technologies in the premarket are electric car maker Tesla TSLA,
down 6% after falling around 8% on Monday. Yes call of the day comes from Saxo Bank’s head of equity strategy, Peter Garnry, who has warned consumers that Tesla is linked to a “risk browser” that includes bitcoin and a Management company Cathie Wood’s ARK deposit.

Tesla announced a $ 1.5 billion bitcoin investment earlier this month. Coupled with Tesla’s weakness, bitcoin went down 10% early Tuesday, which some opposed criticism from Finance Secretary Janet Yellen (see below). That crypto collapse “clearly reflects the employment volatility that Elon Musk has delivered to Tesla,” Garnry said.

Read: Tesla bitcoin gambit already made $ 1 billion, more than 2020 profit from car sales, analyst estimates

At the same time, Tesla is “also the largest position across all ARK Invest ETFs with the emphasis on its largest ARKK ARK Impressive Innovation Fund,
losing 6% yesterday. This is just the collection of risk we have been concerned about and I wrote about two weeks ago, ”Said the strategist.

Read: Stocks are not a bubble, but this is what it is, according to fund manager Cathie Wood

In the Saxo note that plunged deep into the popular, actively managed assets, Garnry pointed to ARK’s density in biotechnology names that he said could be dangerous. if the market decides to reverse. And Tesla shares represent 6.7% of total managed assets across the five ETFs actively managed by ARK, according to data Saxo crushed two weeks ago.

“What it means is that, for any reasons, a correction in allowances for any reason, at higher interest rates or long COVID-19 locks, could lead to a sell-off over bio-stocks. technology or Tesla shares and that performance would cause a decline that could trigger a net outflow of AUM and then the feedback loop has begun, ”said Garnry, at the time.

For her part, Wood, chief executive of ARK Invest and trade fund manager of ARK Innovation, said last week that she was surprised by how quickly companies are adopting bitcoin, and that its “Confidence in Tesla has grown.”

The markets

ES00 stock futures,

+ 0.05%

falling, led by techs, with SXXP European stocks,
sinking except some travel stock. Asian markets had 000300 mixed days,
CL00 oil prices,
+ 0.60%
rising, while the yield is a close look at TMUBMUSD10Y’s 10-year Finance note,
trading at around 1.35%.

The card

Finance Secretary Yellen may have let off some steam from BTCUSD bitcoin,
after repeating some concerns about the cryptocurrency in an interview with the New York Times Design Book. Bitcoin eventually went down 13% to $ 47,909, bringing a handful of other cryptocurrencies down with it.

The buzzard

All eyes on Federal Reserve Chairman Jerome Powell, who is embarking on a two-day testimony on Capitol Hill. With over 10 million Americans still unemployed, ”said Mr. Powell will be out of his way, I’m sure, putting tapering to bed and rightly so, because I’m scared to think what a taper-tantrum of the 2020s will look like, ” said Jeffrey Halley, senior market analyst, Asia Pacific, Oanda.

We also get the latest home building indexes from S&P CoreLogic Case-Shiller and the Federal Housing Finance Agency, along with an update on consumer confidence.

Shares of Home Depot HD home improvement retailer,

falling despite attractive results.

Shares of Churchill Capital CCIV special purpose construction company,
+ 8.37%,
also known as a blank check company, sinking in a premarket. After weeks of rumors, Churchill finally announced a contract to buy electric vehicle company Lucid Motors.

Mourning an additional 500,000 American lives lost by COVID-19, President Joe Biden witnessed a moment of silence late Monday and urged the public to “shelter up.”

Facebook FB social media group,
says it will restore links to news articles in Australia, five days after the country’s proposed media law changes.

Read at random

“I can make people unhappy and they have no clue.” Redditors on a positive pandemic.

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