Tesla Stock News and Forecast: TSLA rises as markets stage massive recovery

TSLA stock recovers as market u-turns after hot CPI.
Tesla CEO Elon Musk still set on Twitter takeover.
TSLA bounces perfectly off support.

Ivan Brian FXStreet

Tesla (TSLA) followed markets in making a sharp u-turn and reversing higher on Thursday following another hot CPI report from the US. Tesla shares closed up 2% at $221.72. Action in the premarket after the CPI report was looking ugly, but a massive short squeeze completely turned the entire equity market around.

Tesla stock news

Tesla stock has been suffering from rising rates, and that trend looks set to continue. Despite the equity market recovery, bond yields did not especially retreat on Thursday. Yes, the 10-year spiked above 4% and came back below the key level but only just barely. What appears to have happened was a combination of poor liquidity and overly negative sentiment in positioning. We had alluded to this in our weekly and daily notes but were surprised at just how powerful the reversal was.

We may see a period of stabilization now ahead of earnings season. So far the early trends appear to show companies at the lower end of discretionary spending are faring well. Pepsi (PEP) and Domino's Pizza (DPZ) have so far shown that customers will still spend on the lower end of the scale. It remains to be seen how higher-end discretionary companies fare. In this regard Apple (AAPL) is key. Are consumers willing to spend on an expensive new iPhone or will they just opt for a few more pizzas and Pepsis instead?

We then of course have the whole Twitter (TWTR) saga still weighing over the Tesla stock price. Speculation continues daily on if the deal will proceed and how Elon Musk will fund it. Will he have to sell more Tesla stock?

We already had a decent sell-off in Tesla on the back of its delivery numbers at the start of this month. Now we do not have long to wait to see how the bottom line was affected. Tesla earnings are out on October 19. I believe the market will already have priced earnings down, so the risk-reward may be skewed higher.

Tesla stock

Technically, Thursday saw a perfect bounce from support at $207. That is the key level as a break will likely see a test of $160 at the bottom trend line and also the 200-week moving average. Holding $207 is key and should then see a move to $254.

Tesla (TSLA) daily chart

Author

Ivan Brian

FXStreet

Ivan Brian started his career with AIB Bank in corporate finance and then worked for seven years at Baxter. He started as a macro analyst before becoming Head of Research and then CFO.

AUD/USD edges higher above 0.7050 as hot CPI lifts RBA rate hike odds

The AUD/USD pair gathers strength to near 0.7055 during the Asian trading hours on Thursday. The Australian Dollar edges higher against the US Dollar as hotter inflation data bolsters expectations of Reserve Bank of Australia rate hikes. The US September Personal Consumption Expenditures inflation report will be in the spotlight later on Thursday.

USD/JPY retakes 158.00 as USD stalls the post-FOMC corrective slide

USD/JPY attracts some dip-buyers during the Asian session on Thursday, climbing back above 158.00 as the US Dollar reverses part of the post-FOMC pullback from a two-week high. Bulls, however, await key US macro data – the Advance Q3 GDP and the PCE Price Index – before positioning for further gains. Focus will then shift to the crucial BoJ policy update on Friday amid firming expectations for a December rate hike.

Gold weakens further below $4,050 amid Fed rate hike bets and Iran risks

Gold sticks to intraday losses below the $4,050 level heading into the European session ,and for now seems to have snapped a three-day winning streak to the weekly top set the previous day. The US Dollar attracts fresh buyers after Wednesday's post-FOMC corrective slide from a two-week high and is seen as a key factor weighing on the precious metal.

US GDP expected to grow at 3.2% in Q3

The United States Bureau of Economic Analysis is set to publish its preliminary estimate of the Gross Domestic Product for the July-September period on Thursday, with analysts expecting the data to show annualised growth at a solid 3.2%, a decent improvement from the 2.2% expansion recorded in the previous quarter. Markets brace for US growth and PCE data amid geopolitical jitters

European Central Bank is expected to hold interest rates despite high inflation pressures

The European Central Bank concludes its two-day monetary policy meeting on Thursday and will announce its decision at 13:15 GMT. The bank is widely expected to leave the interest rate on the Main Refinancing Operations and the Deposit Facility unchanged at 2.65% and 2.50%, respectively, after having raised both of them by 25 basis points in September.

Anthropic pledged $270 billion to Amazon, Google, and Microsoft. Here's who actually gets paid

Anthropic owes Amazon, Google, and Microsoft at least $269.4 billion for computing power, even if it uses less. All three sell its models and handle its billing, and Amazon and Google own stakes and lend it money, so they get paid regardless of how the IPO goes. The Dario Amodei-led Anthropic filed its initial public offering (IPO) on Monday, seeking a listing on the Nasdaq under the ticker ANT.