Just as the interest rate hiking cycle had a suppressive effect on the economy to curb inflation, the upcoming interest rate cuts are viewed as relieving the pressure. Scheduled for 17-18 September, the FOMC meeting should deliver the first rate cut since 2020. are up $1.33 or 1.86% at press time. For September, FedWatch tool suggests a 50 bps cut with 61% probability, lowering the interest rate from present 5.00% – 5. 25% to 4.75% – 5.00% range.
But with these factors in mind, following a market correction, which stocks could benefit from an alleviated interest rate regime?In October 2023’s earnings call, Elon Musk made it clear that a high interest rate regime is a great threat to Tesla Inc's (NASDAQ: Tesla already dropped DEI language from its filing report in January 2024, despite elevated scrutiny from multiple federal agencies, including DoJ, SEC, NLRB and NHTSA. Even more importantly, Trump favors exceedingly high tariffs against China.
In the last three months, TSLA stock went up 29%, priced at $227.68 against the 52-week average of $209.04. This is still significantly under the 52-week high of $273.93 per share.After the initial realignment as the economy shifts from a high to low interest rate regime, stock market investing is likely to make a comeback in a big way.
On Jim Cramer’s show, CEO Walt Bettinger also insisted that the company’s cash sorting issues are not related to a repeat of the regional banking crisis. Furthermore, Textron employs a wide range of DEI initiatives. This burden could be eliminated with former President Trump’s 2nd term to operate more efficiently. In Q2 2024 earnings, the company reported $3.5 billion revenue, of which $25 million went to interest expenses.
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