Why Stock Prices Are Hitting Record Highs Despite Rising Interest Rates in the U.S.: The Thinking of ARK's Cathie Wood That Can Also Help Japan's Economic Growth
According to an explanation by Cathie Wood of ARK Invest, the reason stock prices are hitting record highs despite rising interest rates is that the primary driver of the rate hike is not ‘inflation’ but ‘the acceleration of real economic growth’.
At a time when there are concerns that interest rate hikes will push down the Japanese economy and squeeze the lives of consumers, Japan has yet to fully commit to a direction where economic growth generates solid wage increases and widespread job creation to beat inflation. Should we just sit by and watch as we return to deflation and are eroded by overseas forces with cheaper products and cheaper labor?
The thinking here is not only useful for individual investors aiming to build assets by looking ahead, but it is also a perspective currently lacking in Japan. I have decided to summarize it here in the hope that it will be incorporated into the Japanese government’s economic growth strategies and policies.
Economic Turning Point: Technological Innovation Since the Industrial Revolution and Macroeconomic Outlook
This article is based on an analysis by Cathie Wood of ARK Invest regarding the impact of the current technological revolution on the macroeconomy.
The main point, which many have noted before, is that the current technological innovation centered on AI has the potential to bring about economic transformation that rivals or even surpasses the Industrial Revolution.
In fact, this is said to explain why the U.S. is achieving economic growth and seeing rising stock prices despite high interest rates. And this force pushing up interest rates is, historically speaking, a rare ‘expectation of real economic growth’.
Let’s consider the following key points of insight:
・Five future innovative platforms
・Two components of long-term interest rates
・The true nature of what is pushing up interest rates
・Inflation-suppressing factors and cost reductions
・Fiscal policy, debt reduction, and sustainability
・Labor market and rising stock prices
・Implications for the present
By looking at these points and forecasting the technological revolutions in AI, energy, and quantum technology, I believe we can reduce the probability of misjudgments in investment by adopting a worldview that moves beyond an AI-only perspective.
Now, let’s first look at the key points regarding the direction in which the world is currently heading, together with our Entry Plan subscribers.