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Speaking at Tesla’s 2022 Annual Meeting of Stockholders on Aug. 5, Elon Musk predicted that a forthcoming United States recession is going to be “mild to moderate.”
Tesla is witnessing the rise of a landscape in which a risk asset thrives after recently selling almost all of it $1.5 billion in BTC holdings. Musk during a Q&A session at the annual meeting disclosed that six-month commodities pricing for Tesla parts is decreasing with each day.
Musk said that commodities are going down, hinting at the possibility that inflation has already reached its peak. Musk further said that they slightly have an idea of where the prices must be going. The interesting observation is that every commodity getting attached to Tesla is going down in six months from now.
He added that this trend can reverse after they are past peak inflation. The recovery following the inflation period with commodities moving downwards offers a breeding ground for the recovery of risk assets. In theory, it means less narrowing of the U.S Federal Reserve, offering favorable conditions for risk on -investments.
The trend is set to become ironic for Tesla which deprived itself of all its Bitcoin exposure of a profit of around $64 million last month. Musk added that BTC for a later date can go back to the balance sheet of the firm. The meeting of stockholders made some futuristic predictions on macro. It also included the prediction of a potential U.S recession as “relatively mild” and continuing for around eighteen months. Musk said inflation will decline significantly.
Experts were quick to note the irony in Musk’s comments and argue that a rebound in stocks is going to be here for some time. Fundstrat Global Advisors is among these experts. He said before the Fed stops strengthening through key interest rate hikes the markets have reached a bottom. The firm further predicts that in the 2022’s second half, the S&P can reach up to 4,800 points. It will be a boon for crypto markets that have a heavy correlation with moves in equities.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
