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Home / Business / Strategists warn that the tangled market network of Tesla’s Bitcoin-ARK investment may cause trouble for investors

Strategists warn that the tangled market network of Tesla’s Bitcoin-ARK investment may cause trouble for investors



After a sell-off welcoming investors to start the week, Tuesday was a difficult year for technology stocks.

Nasdaq Composite Index
-2.46%
It has risen 40% in the past 12 months, and the market fell 2.5% on Monday because of concerns that rising bond yields may make these technology stocks look expensive. When so-called “risk-free” yields climb, it is much harder to prove seemingly lofty stock valuations.

Electric vehicle manufacturer Tesla TSLA’s shares are leading the way in pre-market trading.
-8.55%,
After falling about 8% on Monday, it fell 6%.our Call of the day From Peter Garnry, head of equity strategy at Saxo Bank, he has been warning customers that Tesla is stuck in a “risk cluster”

; involving Bitcoin and Casewood’s ARK investment management company.

Tesla announced a $1.5 billion investment in Bitcoin earlier this month. With Tesla’s weakness, Bitcoin fell 10% earlier on Tuesday, partly due to criticism from Treasury Secretary Janet Yellen (see below). Garnry said that the fall in cryptocurrencies will “clearly illustrate the volatility of earnings that Elon Musk has delivered to Tesla.”

read: Analysts estimate that Tesla has made $1 billion in Bitcoin, exceeding the profit of car sales in 2020

At the same time, “Tesla” is still the largest position among all ARK Invest ETFs, which puts pressure on its largest fund, ARK Disruptive Innovation Fund ARKK.
-5.79%
It fell by 6% yesterday. This is the risk group we have been worried about, Wrote about two weeks ago,” said the strategist.

read: Cathie Wood, a fund manager, said that stocks are not in a bubble, but this is the truth

In the Saxo document, Ganari emphasized his deep entry into the holdings of popular and actively managed funds. He emphasized Ark Aviation’s focus on biotech names. He said that if the market decides to reverse this trend, That would be risky. According to data compiled by Saxo two weeks ago, Tesla shares accounted for 6.7% of the total assets under management of ARK’s five actively managed ETFs.

“This means that, for whatever reason, the correction of stocks may be higher interest rates or a prolonged COVID-19 lock-up, which may trigger a sell-off of biotech stocks or Tesla stocks, and cause performance deterioration, thereby It may lead to a net outflow. AUM, and then the feedback loop begins.” Garnry said at the time.

For her part, Wood, the CEO of ARK Invest and manager of the popular ARK Innovation exchange-traded fund, said last week that she was surprised at how quickly the company adopted Bitcoin, and that she was surprised by “Tesla’s Confidence has increased”.

market

Stock futures ES00,
-0.47%

YM00,
+ 0.02%

NQ00,
-1.56%
Driven by technology stocks, European stock markets SXXP fell,
-0.74%
Except for some travel stocks, the Asian market was mixed 000300
-0.32%.
Oil price CL00,
+ 0.58%
Is rising, and the yield of the closely watched 10-year U.S. Treasury bond TMUBMUSD10Y,
1.366%
The transaction price is about 1.35%.

chart

Treasury Secretary Yellen may have evaporated Bitcoin BTCUSD a bit,
-10.92%
After being worried about cryptocurrency again in an interview with The New York Times and Trading Manual. Bitcoin has recently fallen by 13% to $47,909. At the same time, Bitcoin has also fallen a lot.

buzzing

All eyes are on Fed Chairman Jerome Powell (Jerome Powell), who is giving a two-day testimony on Capitol Hill.There are still more than 10 million Americans unemployed. I’m sure Powell will do everything he can to do the right thing, because I’m afraid to think what the taper will be like in the 2020s,” said Jeffrey A. Jeffrey Halley said that Wanda

We will also get the latest housing construction index from S&P CoreLogic Case-Shiller and the Federal Housing Finance Agency, as well as the latest information on consumer confidence.

Home improvement retailer Home Depot HD stock,

Although the results are optimistic, they are still declining.

Purchasing the shares of Churchill Capital CCIV, a dedicated acquisition company,
+8.37%,
Companies also known as “blank check companies” are entering the pre-market. After weeks of rumors, Churchill finally announced a deal to acquire Lucid Motors, an electric car company.

President Joe Biden mourned the deaths of more than 500,000 Americans due to COVID-19, observed a moment of silence later on Monday, and urged the public to “cover up.”

Social media group Facebook FB,
-0.47%
Said that it would restore the link with Australian news reports five days after Australia’s proposed media law changes.

Random read

“I can speak to people, they don’t have any clues.” Redditors who were positive for the pandemic.

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