Part 6/11:
This shift explains why Tesla didn't rally alongside Musk's bullish outlook. Many investors are reallocating their portfolios, pulling funds out of stocks—particularly high-risk, high-reward ones—due to the attractive risk-free rates on government bonds. Some fund managers are even shorting the S&P 500, betting on market downturns amid the challenging macroeconomic backdrop.
Musk warned that a severe recession could impact Tesla's profitability. He compares the upcoming economic downturn to the 2009 financial crisis, suggesting that demand for discretionary, big-ticket items like cars will weaken. Elevated interest rates further exacerbate this issue, potentially forcing Tesla to lower prices or grow at a slower rate to maintain profitability.