After Tesla CEO Elon Musk Last week, the electric carmaker said it needed to cut staff by about 10 percent and had a “super bad feeling” about the economy, comments that sparked a global debate over a possible recession. Some are saying that if the world’s largest EV company warns on jobs and the economy, investors should reconsider their forecasts on margins and earnings growth; While others are saying “we’re going to navigate without a slowdown”.
what analysts are saying
Morgan Stanley analyst Adam Jonas said in a research note, “Tesla is not your average canary in a coal mine. It’s like a whale in a lithium mine. If the world’s largest EV company warns on jobs and the economy, then Investors should reconsider their forecasts on margins and top-line growth,” he said.
Mark Zandi, chief economist at Moody’s Analytics, says the US Federal Reserve may pull it off. “I still think we’re going to navigate without a recession. But, obviously, it’s going to be very, very tight because the risks are very high.”
Lloyd Blankfein, senior chairman of Goldman Sachs Group, said in a tweet: “Back on the negativity on the economic outlook. Starting from a strong place, with more jobs than takers, and adjusting to higher rates. Risky times, but may still come off slowly.”
Megan Greene, global chief economist at the Kroll Institute, said worries about a recession are premature. Consumers, the bastion of the economy, still have a lot of financial firepower built up earlier in the pandemic, when they were kept at home and showered with stimulus checks from the federal government, according to a Bloomberg report.
Deutsche Bank AG economist Peter Hooper has said the Fed may need to raise short-term interest rates to 5 percent to rein in inflation. That would be the highest since 2007 and well above the Fed’s current 0.75 percent to 1 percent target range.
US President Joe Biden said that let me tell you that while Elon Musk is talking about (job cuts and weak economy), Ford is increasing its investment in a big way.
“The former Chrysler corporation, Stelantis, they’re also making similar investments in electric vehicles … so, you know, a lot of luck on their trip to the Moon,” he said.
2008-09 recession
After the bursting of the US housing bubble, the US experienced an economic downturn that turned into the global financial crisis from 2007 to 2009. The effects of the recession were felt all over the world. In 2009, global trade declined by 11 percent and India’s exports fell by 16 percent. In India, rating agencies had revised downwards the growth projections.
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