In this podcast, Cathie Wood and Brett Winton discuss technological convergence, artificial intelligence, and the disruptive potential of technological innovation. They also touch on topics such as the impact of AI on economic growth, negative trends in banking, and the relationship between metals to gold ratio and treasury bond yield.
Technological convergence and artificial intelligence are driving innovation in various sectors, with AI serving as the central technology catalyst.
The acceleration of AI, its role in productivity gains, and its potential for both positive and negative deflation highlight the transformative power of this technology.
Deep dives
The Impact of Technological Convergence and Artificial Intelligence
Technological convergence and artificial intelligence are discussed in this episode. The hosts delve into the transformative potential of these technologies and how they are driving innovation in various sectors. They highlight the acceleration of AI, its role as a catalyst for other technologies, and the profound impact it will have on productivity gains. The discussion also emphasizes the deflationary effect of AI and its potential to create both positive and negative deflation. The hosts present a positive outlook for macroeconomic growth, driven by the convergence of technologies like AI, energy storage, robotics, and more.
Mixed Employment Data Raises Confusion
The episode reviews the latest employment data, which presents conflicting signals. While non-farm payroll employment exceeded expectations, household employment experienced a decline in January and December. This contrasting data leads to confusion regarding the true state of the economy. The hosts discuss different indicators such as full-time and part-time employment, average hourly earnings, and workweek duration. They also point out the potential impact of technological disruption, shifts in the global economy, and the implications of negative revenue growth for traditional companies.
The Potential for Economic Transformation and Deflation
The hosts explore the potential for a major macroeconomic transformation driven by technological innovation. They explain the historical correlation between breakthrough technologies and a structural shift in economic growth. They highlight the role of AI as a catalyst for exponential growth in various industries and predict a significant rise in productivity gains. The discussion also touches on the implications of declining prices and the potential for negative inflationary pressure. The hosts believe that embracing innovation, particularly in the AI age, will be crucial for corporations to navigate and benefit from the anticipated deflationary forces.
Investment Opportunities and Market Outlook
The episode concludes with a focus on investment opportunities and the market outlook. The hosts highlight the remarkable growth potential of disruptive innovation, estimating that the market cap of innovative technologies could reach $220 trillion in the next few years. They emphasize the need for investors to recognize the shift in the traditional world order and the potential limitations of traditional benchmarks. The hosts also discuss the significance of real interest rates, the role of Bitcoin as a store of value, and changing dynamics in credit default swaps. They maintain that innovation-based strategies offer resilience amidst economic uncertainties.
On this week's edition of FYI we are featuring the February 2, 2024 edition of In The Know. On this edition, ARK CEO and CIO Cathie Wood is joined by ARK Chief Futurist, Brett Winton. Together, they discuss technological convergence, artificial intelligence, and give a sneak peak into this year's Big Ideas Report, which you can download here: https://ark-invest.com/big-ideas-2024
This month we’re again responding to a few requests by supplementing this episode with charts and data to help illustrate ARK’s perspective on and outlook for the global economy.
As always, Cathie discusses fiscal policy, monetary policy, market signals, economic indicators, and innovation. We hope you find this monthly series useful, especially during periods of heightened volatility. Stay Healthy. Stay Innovative.
Key Points From This Episode
Converging Technologies Are Generating A Historic Technological Wave
AI Serves As The Central Technology Catalyst
AI Is Accelerating Faster Than Forecasters Anticipated
Discontinuous Changes In Macroeconomic Growth Are The Norm, Thanks To Technology
Technological Innovation Could Be Disruptive Enough To Dominate Global Equity Market Capitalizations
The Cost Of Authoring The Written Word Has Collapsed
Monetary Policy
M2 Money Supply vs. CPI: Year-over-Year
Federal Funds Rate vs. YoY Headline CPI
Real Federal Funds Target Rate
Yield Curve 10 Year Treasury Yield Minus 2 Year
New Tenant Rent Index
WCI Composite Container Freight Benchmark Rate
Global Supply Chain Pressure Index (GSCPI)
Bloomberg Commodity Index
Metals/Gold Ratio vs. US 10 Year Treasury
Bitcoin To Gold Ratio (Log)
Investment Grade and High Yield Index Credit Default Swaps
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