More than 70% of car buyers use installment payments.
So high interest rates are very bad for the automobile industry, and while the upcoming Fed rate cut is a good thing for Tesla, interest rate cuts are usually a sign of a recession, so when a recession occurs, all assets except stocks, gold, and dollars should be thrown first. Because the dollar is the best during a recession.
However, if the recession comes weak and interest rates fall slowly, it is good for risky assets.
It should be a boon for Tesla’s stock price, which has been oddly weak, as the recently announced key economic indicators point to a weak recession (soft landing) and a rate cut is certain in September.
The reason is that someone dumps Tesla stock.
Perhaps the last crash has led fund managers to reduce their share of Tesla investments and buy other stocks that are likely to have relatively high returns.
Today, we’re reversing yesterday’s Tesla drop today, and we’re hoping that the Tesla dump ended yesterday and it’s starting to turn upward again.