Tech Investor Predicts 'Bargain Basement' Holiday Prices and an End to the Cost-of-Living Crisis

Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.


  • ARK Invest's Cathie Wood says businesses have over-ordered, which could mean bargain basement prices this holiday season.
  • The innovation-focused investment fund believes the Fed is making a mistake by aggressively raising interest rates.
  • Having a well-stocked emergency fund and paying down high interest debts are two ways consumers can prepare for a recession.

Brace yourself for holiday season sales, says ARK Invest's Cathie Wood.

ARK Invest founder and CIO, Cathie Wood, has good and bad news for Americans grappling with continued pressure on their bank balances. The good news is that there could be an end in sight for spiraling costs. Indeed, we may even get some holiday season bargains. But the bad news is that there could be even more economic trouble in the pipeline.

Why we could see steep discounts this holiday season

In a recent video, Wood told viewers, "You should look for and demand bargain basement pricing this holiday season." The reason? Businesses like Nike have more and more products sitting in their warehouses -- and there's more inventory on the way. If companies have over-ordered, they'll need to shift those goods which could translate into great deals for consumers.

Wood pointed out that "retailers are awash with inventories," and used Nike to illustrate her point. She says Nike's global sales were up 3.6% in the last quarter whereas its global inventories grew by 44.2%. Its North American inventories were up 64.8%. Moreover, the inventories in transit that haven't yet hit the shelves were up 85%. "You know what's going to happen," she said. "In order to clear the shelves, Nike will have to cut prices and retailers will as well."

If the analysis from the innovation-focused investment management firm is correct, Nike is just one of many companies that have too much merchandise in the pipeline. If you haven't yet started buying gifts for the holiday season, it might be worth waiting a while longer to see if prices do indeed fall.

Why further economic woes aren't good for consumers

The cost of groceries, gas, and housing have all increased dramatically in the past year. Some people have been forced to dip into their savings or take on debt just to keep food on the table. As such, if big retailers do drop their prices, it could be a welcome release.

But before you get too excited about upcoming sales, know that there's a sting in the tail. ARK Invest argues that the Federal Reserve's continued rate hikes are a mistake that could lead to huge economic problems. The tech investor believes the central bank is basing its decisions on a very limited number of economic indicators.

In an open letter to the Fed, Wood says it is making a "policy error that will cause deflation." On the face of it, deflation -- the opposite of inflation -- could mean prices return to normal. But if the Fed has been too aggressive in its rate hikes, it could also trigger a recession and devastate the economy.

More and more business leaders, financial experts, and global bodies now warn a recession is likely. The question is how long it will be and how severe. The crux of ARK Invest's latest research seems to be that many prices are already falling, employment is not as strong as some figures indicate, and that further interest rate hikes risk serious economic trouble. Consumers may get rock-bottom holiday prices, but that won't help much if dramatic job cuts are on the horizon.

Bottom line

Some of the problems we face today are unprecedented. It's been over a century since the Spanish flu hit America, and the world is now a very different place. That makes it hard to predict what will happen next. We're still feeling the shockwaves caused by shutting down large parts of the economy due to COVID-19, supply chain hitches, and a huge stimulus program. That's before we consider the impact of Russia's invasion of Ukraine.

Given that high-profile economists can't agree about what might happen next, it seems like a good time to reduce high interest debt and build your financial cushion. The holiday season is often expensive, so take advantage of any sales and look for other ways to minimize costs. Put any extra cash into your emergency fund. If you don't yet have three to six months' worth of living expenses socked away in a savings account, prioritize this as much as you can. As a consumer, the more you can prepare the better.

Alert: our top-rated cash back card now has 0% intro APR until 2025

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee! Click here to read our full review for free and apply in just 2 minutes.

Our Research Expert

Related Articles

View All Articles Learn More Link Arrow