- Summary:
- Bullish Sentiment on Rate Cuts: Stock markets show bullishness due to expectations of a significant rate cut by the Federal Reserve, driven by weak jobs data and low inflation.
- Lloyds' Mixed Outlook: Lloyds faces potential challenges from new UK tax regulations and ongoing FCA investigations, but its strong balance sheet provides near-term support.
- Tesla's Potential and Risks: Tesla's share price remains under pressure despite positive signals from technical indicators, with competition and tax impacts in Europe posing challenges.
- Nio's Growth and Challenges: Nio's share price has surged recently, supported by new vehicle releases, but could be affected by broader economic concerns in China.
- Market Predictions: Key levels for Lloyds, Tesla, and Nio are highlighted, with potential upside or downside depending on price movements and market sentiment.
Table of Contents
Stock markets flashed signs of an underlying bullishness last week, driven by conviction that the Federal Reserve could slash interest rates by as high as 50 basis points. A weak jobs market and declining inflation were underlined by last week’s forecast-beating rise in Initial Jobs Claims figure and soft Consumer Price Index (CPI) figures.
Based on the outlook above, traders are convinced that a rate cut is inevitable this Wednesday. According to the CME FedWatch Tool, there’s a 55% chance that the Fed will reduce interest rates by 25 basis points and a 45% chance of cutting it by 50 basis points. In the midst of this set up, we look at this week’s top share price prediction in view of the likely performances of Nio, Lloyds and Tesla share prices:
Lloyds
Lloyds share price has been sending mixed signals in September and has gained 1.2 percent in the last five trading sessions. The lender has performed well this year and its share price has gained 21.4 percent year-to-date. That said, it faces likely headwinds in the coming weeks, on account of two key factors
First, Lloyds (LON: LLOY) could find itself on the receiving end of a new tax regime announced by British Prime Minister, Keir Starmer in August. Starmer has not clarified if the proposed windfall taxes will incorporate banks. Nonetheless, analysts believe that he could walk back on his campaign promise and impose the taxes, following his “painful, but necessary decision” mantra.
Secondly, Lloyds faces the prospect of incurring substantial penalties once the Financial Conduct Authority (FCA) concludes its investigations into the car finance scandal. The bank is the UK’s largest car loans issuer and is predisposed to potential costly damages if found culpable. To that end, it has set aside £450 million to cover the downside of such an outcome.
Also, the Bank of England (BoE) is expected to retain interest rates at 5 percent this week, following a rate cut in August. However, another cut could come before the year ends, and that will eat into Lloyd Bank’s margins.
However, it’s not all gloom for Lloyds Banking Group, as it has built a strong balance sheet that will likely keep it on the growth path and enable it to cushion itself against external shocks. That will provide near-term support to its share price.
Llyods Banks share price outlook
Lloyds Bank will likely stay up in the near-term as action stays above the 57.90 pivot mark. That will likely support gains to the first resistance level at 58.20. However, if the buyers extend their control, they could break above that mark and send the share price to test 58.50.
On the other hand, the sellers could take charge if the share price goes below 57.90. With the sellers in control, the first support is likely to come at 57.70, but extended control could enable movement to break below that mark and invalidate the upside narrative. Also, that momentum could extend the decline to test 57.36.
Tesla
Tesla share price snapped a five-session winning strak on Monday, going down by 0.7 percent to trade at $228. The EV maker’s stock price has been trading below the $240 mark since late July, and will likely stay subdued in the near-term. However, on the upside, it has recently returned above the 20,50, 100 and 200 Exponential Moving Average (EMA) levels, signaling an underlying bullishness.
Tesla sending mixed signals
Looking ahead, Tesla (NASDAQ: TSLA) will likely be propelled by anticipation surrounding the much-awaited unveiling of its Robotaxi in the next three weeks. There has been a long-running argument as to whether Tesla is purely a car manufacturer based on its inclination towards high-grade tech integration, and the robotaxi unveliling could settle the debate.
That said, the company faces stiff competition in Europe, with buyers increasingly embrasing other models. According to date from JATO Dynamics, in Germany, BMW’s iX2 model surpassed Tesla’s ModelY to become the highest-selling model in August. In France, Tesla’s sales dropped by 50% YoY in the same month. The drop is partly attribututed to the EU’s move to raise taxes on EV’s manufactured in China, where Tesla has one of the largest factories.
On the upside, however, Tesla’s sales figures rose in singapore, where its Model 3 was the best-selling sedan in August. Also, the company has started hiring for potential expansion into Phillipines.
TSLA share price forecast
TSLA share price will likely continue heading down if resistance persists at $229. That will likely establish the first support at $225. However, extended control could strengthen the downward momentum to break below that mark and test 223.
Alternatively, a move above 229 will favour the buyers to take control, but the upside will likely encounter initial resistance at 231. However, further bullishness could break above that mark to test 234. Meanwhile, the downside narrative will be invalid at that point.
Nio
Nio share price was on a hot streak in the first ten days of September, bt then got rejected at the 5.70 level. However, its outlook stays strong, based on a recent shift in its fundamentals. However, after gaining 34 percent in the last two weeks, Nio (NYSE: NIO) will likely subside as traders weigh its fair value.
Particularly, there is much interest in the performance of its newly-released Onvo L60 vehicle model. Nio releases monthly sales figures, and the September digits will be particularly important as it will contain the first Onvo L60 sales numbers. The model hit the stores at the beginning of the month, and it is the Chinese EV maker’s cheapest model yet.
Nio CEO William Li stated in August that the company could break even if its sales average 30,000 per month. After selling more than 20,000 units for the past four months, Nio could finally hit the 30k mark thanks to their new product. That said, China’s economy isn’t doing so well, and that could impact sales if the situation does not improve.
Nio share price today
The downside will likely prevail if resistance persists at the 5.52 pivot. With the sellers in control, initial support could come at 5.47. However, that level could be breached if the downside momentum strengthens. In effect, the share price could go lower to test 5.40.
Alternatively, if the price goes above 5.52, the bulls will take control, and Nio share price will likely meet the first resistance at 5.57. However, that barrier could be breached on stronger buying momentum, which could send Nio to test 5.65. Furthermore, that could invalidate the downside narrarive.
