G.L.A INVE$T RE$EARCH - THE INFINITE INNOVATION NEWSLETTER - "MONTHLY MARKET UPDATE / OUTLOOK WITH CATHIE WOOD & COACH KYLE"

G.L.A. INVE$T RE$EARCH THE INFINITE INNOVATION NEWSLETTER Monthly Market Update / Outlook With Cathie Wood and Coach Kyle October 3, 2026

Happy Saturday Night To The Greatest Living Americans!

Every month, Cathie Wood walks through fiscal policy, monetary policy, the economy, and market signals on ARK Invest's "In The Know." This Employment Friday edition was one of her most important yet. She opened by answering a Bill Ackman post about rising government interest costs, then laid out the core of her latest letter:real growth much stronger than expected, inflation much lower than expected, and interest rates rising for the right reason — growth, not inflation.

Her message in one line:this is not the 1970s. It's the 1980s, with a far bigger technology revolution behind it.

That's why we keep coming back to ARK.Cathie looks five to ten years out while most of the market is staring at the next print. You don't have to agree with every forecast to benefit from the framework. You do have to understand it.

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The Episode in Brief

• The Ackman debate: Ackman's worry — rising interest costs feeding a vicious debt cycle — echoes the late-1970s fear Cathie remembers from college. Her answer: the 1980s broke that cycle through productivity, falling inflation, and a PC-and-software revolution. Today, she says, five platforms — AI, robotics, energy storage, blockchain, and multiomic sequencing— will do it again, at a bigger scale.

• Deflation is on the table: She "would not be surprised" to see deflation, especially if oil cracks the way ARK expects.

• Rates in context: The 10-year Treasury above 5% feels like a spike, but it sits near the middle of the range going back to 1790. In her view, the real anomaly was the 1970s–COVID era, not today.

• The market is working again: After years of the Fed "spoon-feeding" the economy, she believes the new Fed under Chairman Kevin Warsh will be "very good for all of us."

• The big growth call:ARK's model shows roughly 7%–8% real GDP growth (7.3%) for the five years ending 2030,versus about 3% from the IMF. "Most people think that's crazy," she said. "That's what makes markets."

Ten Key Takeaways from Cathie

1. Inflation is cooling under the surface

Headline PCE inflation sits at 3.4% year over year — still far from the Fed's 2% target, which is why Warsh has sounded hawkish. But Cathie points to Truflation: headline is near 2.7% (oil-driven), while core keeps ticking down toward pre-COVID averages. She also highlighted the inflation diffusion index Warsh watches, which is now reversing quickly.

2. The dollar is a hidden anti-inflation weapon

Cathie rejects the "American exceptionalism is over" narrative. Business-friendly policy, low effective corporate tax rates (she estimates around 8%, thanks to 100% first-year depreciation on factories and data centers), and an investment boom are pulling capital into the U.S. On the Fed's broad 26-country trade-weighted measure, the dollar is near all-time highs — and she expects new highs. A stronger dollar pressures commodity prices.

3. The U.S. is the AI capital of the world

Her standout stat, citing Bloomberg: about 90% of the world's data-center financing is in the United States. Tax refunds from accelerated depreciation are being recycled into more domestic investment, just like the early-1980s playbook.

4. Gold peaked when Warsh was named

Cathie argues Volcker and Greenspan quietly used gold as a policy guide, and that the last 15–20 years of monetary policy have been poor by that measure. The notable detail: gold peaked the day (or day after) President Trump named Warsh and has been falling since. She expects further declines as policy becomes more disciplined.

5. Oil at $30–$35 — without a crisis

Transportation drives roughly 57% of oil consumption, and it's moving to electric — first in China and Europe, now the U.S. Combine that with tighter monetary policy, and ARK sees oil returning to the $30–$35 range seen during past crises.This time, the driver would be a technology shift, not a collapse.

6. AI costs are collapsing — and revenue is exploding

This is the engine of the whole thesis. Genomic sequencing costs fall about 40% for every cumulative doubling in genomes sequenced (Wright's Law). AI inference is far more dramatic: costs at a fixed performance level are falling about 99.99% per year.Jevons paradox kicks in — lower prices, explosive volume. Her example: OpenAI's annualized revenue run rate went from $20 billion at the end of last year to a reported $70 billion, topping the $65 billion Anthropic reported in July. "We've never seen anything like this," she said, calling it a microcosm of what's coming for the whole economy.

7. The platforms are converging

ARK maps 15 technologies across the five platforms, with AI having the biggest impact on all of them.New links are forming between AI and blockchain through agentic payments and agentic commerce. Her term for the result:"good deflation"— falling prices that trigger a growth boom.

8. Productivity is the key to everything

In the 1980s and 1990s, the PC, software, wireless, and smartphones lifted productivity growth. Cathie expects a replay on a much bigger scale, with productivity growth accelerating into the 5%–6%+ range — the mechanism behind her high-single-digit GDP call.

9. An inverted yield curve doesn't have to mean recession

During the Industrial Revolution, the yield curve was inverted more than 60% of the time. The post-COVID inversion produced a "rolling recession" — housing, manufacturing, small businesses, lower-income consumers — but never a full recession. She also notes the curve couldn't get back to its old 200–300 basis points of steepness even with full stimulus, and is now back in the 40s. Her read: the Treasury market is sniffing out deflationary undercurrents.

10. The $40 trillion debt headline is measured the wrong way

Cathie agrees government spending is too high ("spending is taxation"), though she supports defense spending. But debt-to-GDP compares a balance-sheet number to an income-statement number.Measured like-for-like against national wealth, debt sits closer to historic lows than highs. She also agrees with Treasury Secretary Bessent's target of cutting the deficit from the mid-5% range to 3% by the end of the term. And the recent rise in rates? It's driven mostly by real yields, not inflation expectations, which have stayed steady.

Employment Friday: Something for Everyone

• Jobs: Nonfarm payrolls came in well below expectations, while household employment showed 400,000+. Year over year, employment is roughly flat, while labor-force growth has slowed with retiring boomers and departing immigrants.

• Unemployment: 4.2% overall, but 9.9% for 16–24 year olds. Cathie's advice to new grads: start a company with AI, solve a problem, and keep interviewing — you'll go to the head of the class.

• Wages: Average hourly earnings rose just 0.1% (about 3% annually), possibly from fewer high-paid tech jobs. She expects a labor shortage and rising pay as productivity climbs above 3%.

• Money and velocity: Money growth is about 5.7%, but velocity is flattening, so she doesn't see it fueling inflation. Federal outlays are rising, led by defense, but monetary policy isn't accommodating them.

• Consumers:Michigan and Conference Board sentiment are "terrible." Diesel near $6.50 and affordability pressure are hitting savings rates.

• Housing:Still in recession. Mortgage rates are above 7%, and new-home inventory sits near all-time highs.

• Manufacturing:Out of recession. Core capital spending is breaking out of a long base, with defense on top. "The longer the base, the larger the breakout."

• Trade:The deficit will keep widening because the U.S. is outgrowing the world. The flip side is a capital surplus and more foreign direct investment.

• Profits: Domestic profitability is near record levels, and she believes productivity can push it to new all-time highs.

Market Signals Cathie Is Watching

• China is weak: Auto production runs at 30–35 million units a year, but domestic consumption has dropped from about 30 million to roughly 19 million. U.S. auto sales fell below 16 million in September. She believes auto sales, like oil, have peaked secularly, with ride-hailing and affordability playing a role.

• S&P vs. oil and gold: If oil falls as ARK expects, the S&P should rise sharply relative to oil. S&P-to-gold, a key warning sign in the 1966–1982 bear market, is turning up again — and she expects new highs. "We are not going back into the 1970s."

• Bitcoin is beating gold: Bitcoin-to-gold has turned higher. Since 2019, the correlation between them has been about 0.1, and recently negative. "We do think the turn is in here for Bitcoin."

• Credit is calm: Bank credit default swaps are low, suggesting limited perceived systemic risk, even with private credit under strain. High-yield spreads ticked up but remain low historically.

• AI and politics have decoupled: AI stocks no longer track prediction-market odds (via ARK partner Kalshi) of Republicans keeping Congress. Her view: a split Congress means gridlock, while the administration's "self-regulate, but you're liable" approach to AI stays in place.

• The one yellow flag — hyperscaler credit: Historically cash fortresses, hyperscalers are now tapping debt markets, and their credit default swaps are rising. High-yield AI credit is widening more than investment grade, likely driven by neocloud providers and possibly Oracle.

Coach Kyle's Take: What This Means for Innovation Investors

1. Rising rates aren't automatically bad news.If yields are rising on real growth, that's a strong-economy signal. Know why rates are moving before you react.

2. Follow the cost curves.A 99.99% annual drop in AI inference costs is the most important number in this episode. The winners will turn cheaper intelligence into massive volume.

3. Volume wins in a deflationary boom.Favor businesses that grow units and customers faster than prices fall, not those that depend on pricing power alone.

4. Watch the dollar, oil, and gold together.A stronger dollar, falling oil, and falling gold would be the clearest confirmation of Cathie's disinflation call.

5. Track the build-out's financing.AI demand looks real. Keep an eye on hyperscaler and neocloud credit, because how the build-out is funded matters.

6. Bitcoin vs. gold is a signal to watch. If the turn holds, it supports the case for Bitcoin as the next-generation store of value.

7. Stay underwritten.Big forecasts are a reason to research, not to skip valuation, balance-sheet checks, and position sizing.

Coach Kyle's Bottom Line

Cathie isn't predicting a soft landing. She's predicting a regime change: faster growth, lower inflation, a stronger dollar, cheaper oil, and record profitability, all driven by technology converging faster than anyone expected.The consensus is still stuck in a 3% world. ARK is planning for something much bigger, AS IS G.L.A INVEST!!!

She could be early. She could be wrong on the timing. But the data she highlighted this month — collapsing AI costs, exploding AI revenue, cooling core inflation, a manufacturing breakout, and calm credit markets — shows the innovation economy picking up speed.

• Be open to extraordinary progress. Be disciplined about what you pay to own it.

• Watch for ARK's Big Ideas report in January, when Brett Winton's long-term global GDP chart will be updated.

Editorial and Investor Notes

This review is based on the supplied transcript of ARK Invest's "In The Know" Employment Friday episode. Forecasts, statistics, and historical comparisons — including GDP, inflation, oil, dollar, OpenAI and Anthropic revenue, data-center financing, and tax-rate figures — are Cathie Wood's statements and have not been independently verified for this issue. Names that were garbled in the auto-generated transcript, such as Bill Ackman, Kevin Warsh, and Kalshi, have been corrected. Coach Kyle's takeaways are G.L.A commentary, not quotes from Cathie Wood or ARK Invest.

G.L.A INVE$T RE$EARCH content is for research and education only and is not personalized investment advice or a recommendation to buy or sell any security. Coach Kyle is not acting as a broker or financial adviser. Investing involves risk, including possible loss of principal.