A Tough Day On Wall Street📉
May 28th 2023, 12:35 pm
|The Street Brief
Tesla falls on news of output reductions:
- Following news that the manufacturer of electric vehicles, $TSLA, intends to reduce output at its Shanghai gigafactory, the company's stock price fell 6.37% yesterday. According to company insiders, the company would reduce Model Y production by 20% in December due to weak demand.
- Tesla issued a warning in October that it anticipated missing its goals for vehicle delivery this year. The Texas-based company, however, told Reuters that the stories that claimed it would reduce output were "untrue."
US equities decline on rate worries:
- Due to concerns that the FED would keep raising rates to control inflation, US markets closed substantially lower yesterday. As investors consider how high interest rates are likely to rise in 2023 and what that will imply for the economy, stocks finished lower yesterday.
- Last week, after expressing his conviction that the Fed was prepared to pause the pace of interest rate hikes at the upcoming FOMC meeting on December 13–14, Fed Chair Jerome Powell prompted a significant rally in stocks.
Currently, the market is pricing at a terminal rate of 5%. However, the forecasts for the terminal rate may change and impact the market if inflation gets more obstinate. Nevertheless, Mr. Powell, for the time being, thinks that the possibility of a soft landing is "still achievable."
Source: Photo: Qilai Shen (Getty Images)