CNBC’s Jim Kramer said Thursday that the headwinds on the used car market make it uninvestable, and its declining performance is also an indicator that inflation could cool.
“While everyone was worried about the 8.5% Consumer Price Index number – it’s a hot number – you might have noticed that the price of used cars and trucks was 3.8% lower than the previous month,” he said.
“While this is bad news for the used car industry, it could be a great sign for the wider economy because it means we are finally making some progress in bringing inflation under control,” he added.
The “Mad Money” host’s comments came after Carmax reported better-than-expected earnings but missed earnings in its most recent quarter. JPMorgan downgraded the stock due to concerns about how car capacity could affect Carmax’s performance.
“We’re finally seeing what is known as demand crunch. People don’t want to buy used cars if they have to pay so much. পর্যন্ত In the end, used cars can’t go up like this forever,” Kramer said of Carmax’s quarterly results.
He added that now is not the right time to own a used car stock, but he has an option to offer investors a chance to try their luck.
“If you insist on owning a used car game, I say go with Lithia …. I think it’s the wrong moment for that too, but if you don’t agree with me, that’s the way to go to Lithia,” he said.
He is also Dr. Used with Autonation, Sonic Automotive, Group 1 Automotive and Asbury Automotive and has some confidence in new car dealership performance.
“They benefit from a return to the supply of new cars, as automakers eventually get their supply chains in order. More importantly, these dealerships are actually profitable and their stocks are fairly reasonable. He said.
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