New and used automobile costs hold climbing. Don’t count on aid quickly

When it comes to car purchases these days, sticker price can be a sticker shock.

The prices for new and used cars continue to rise in view of the strong demand and the shortage of stocks. While the slowdown in production has improved slightly, there will be no return to normal for car buyers anytime soon.

“The typical dealer experience that consumers are familiar with – dealer lots with rows of cars, negotiating the price and lots of incentives – is unlikely to return this year as it is 4.5. are [million] 5 million consumers waiting on the sidelines for cars, “said Tyson Jominy, head of data and analytics at JD Power.

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“This backlog will keep inventory levels low and prices high for most of 2022,” Jominy said.

An ongoing global shortage of microchips – key components needed to power today’s cars – that began in 2020 continues to slow manufacturers’ production of new vehicles, which has resulted in demand exceeding supply.

“It’s a little better in that there is no more inventory loss – it doesn’t get worse,” said Ivan Drury, Edmunds.com senior manager of Insights. “But we’ll talk to each other for many months until it looks more normal.”

The average transaction price for a new car is now higher than the manufacturer’s suggested retail price, or MSRP: $ 45,872 versus $ 45,209, according to the latest data from Edmunds.

An estimated 89% of buyers pay more than or within 5% of the sticker price, Jominy said.

One reason for the record transaction prices is that automakers have cut their discounts because they generally don’t have to offer big incentives to sell cars.

In other words, new cars don’t stay long in a dealer parking lot: in December, an estimated 57% of cars were sold within 10 days of delivery, according to JD Power. The average time it takes a new car to sell off the lot is a total of 17 days, a record low and less than 49 days a year ago.

Demand has also expanded into the used car market, where buyers are paying an average of $ 29,011, up 27.9% from a year ago, data from Edmunds shows. That ranges from an average of $ 14,124 for a 9-year-old car to $ 30,334 for a 3-year-old vehicle.

One bright spot, Drury said, is that demand for used cars has driven trade-in values ​​well above normal.

“Buy this trade-in,” he said. “Don’t get rid of old assumptions about mileage or depreciation because all that stuff is on the doorstep.”

And while you should be prepared that there is little wiggle room on the price of the car, you may be able to negotiate the value of your trade-in.

In addition, interest rates are generally low at the moment.

“You can still get cheap money,” said Drury, adding that there are still 0% or 0.9% financing offers depending on the make and model you are looking at. Otherwise the average interest rate for a new car loan below 4%, according to Bankrate.

If you are flexible in terms of time when purchasing and cannot find what you are looking for on the dealer lot, it can be worthwhile to order your car.

“Although it can take four to eight weeks for the vehicle to arrive, it will be built to your exact specifications such as features and color,” said Jominy. “And now, some automakers will be incentivizing pre-orders that consumers won’t have when they buy what’s in stock.”

The inventory market can preserve climbing

The stock market rebounded on Friday as investors reacted to April’s worse-than-expected job report indicating that the Federal Reserve’s easy-going policies are unlikely to be leading anywhere anytime soon, CNBC’s Jim Cramer said.

“I know the conventional wisdom is that you have to sell and go in May, but this stupid song has to be withdrawn, at least when it comes to the first week of the month when a lot of the people who hold onto stocks are right have struck well, “said the “Bad money” Host said. “Now that the Fed remains our friend, we can definitely keep climbing.”

Here is Cramer’s schedule for next week’s corporate earnings reports, which provides additional insight into the state of the US economic recovery.

The forecasts for sales and earnings per share are based on FactSet estimates:

Monday: Tyson Foods, Marriott International, Simon Property Group, Occidental Petroleum and Roblox

Tyson Foods

  • Q2 2021 results to be published: before the market; Conference call: 9 a.m.
  • Projected earnings per share: $ 1.15
  • Estimated revenue: $ 11.2 billion

“We’ll hear if the burgeoning chicken shortage will drive prices up [and] likely to hear about the price of corn. As it is, the cost of animal feed continues to rise, food inflation is spiraling out of control, “Cramer said.” Is that being ignored? Difficult to imagine. But it comes right in the shadows of that benign job number, so it probably won’t matter either. “

Marriott International

  • Earnings release for the first quarter of 2021: 7.00 a.m.; Conference call: 8:30 a.m.
  • Projected EPS: 4 cents
  • Estimated Revenue: $ 2.38 billion

“We’re also hearing from Marriott International and I’d love to see what their bookings are like,” said Cramer. “This morning Expedia told us that pleasure trips are filling hotels, but business trips haven’t come back much because everyone is still using Zoom.”

Simon Property Group

  • Earnings publication for the first quarter of 2021: after market entry; Conference call: 5 p.m.
  • Projected earnings per share: $ 2.27
  • Estimated Revenue: $ 1.1 billion

“I bet they’ll turn the lights off,” said Cramer, naming the mall operator one of his favorites. “Brick and mortar retail is booming, at least in more affluent communities. Simon’s bread and butter are right there, so I think the numbers will be tremendously good.”

Occidental Petroleum

  • Publication of results Q1 2021: After Market: Conference call: Tuesday, 1 p.m.
  • Estimated loss per share: 33 cents
  • Estimated Revenue: $ 4.79 billion

“We got some amazing numbers from oil producers enjoying this environment where crude oil sells for more than $ 60 a barrel. They make money there. I bet Oxy is one of them,” he said.

Roblox

  • Earnings publication for the first quarter of 2021: after market entry; Conference call: Tuesday 8:30 a.m.
  • Projected EPS: 8 cents
  • Estimated Revenue: $ 573 million

“The company was floated on one of those direct listings where stocks tend to be undervalued. I think this could be your chance to buy shares in a fast-growing company before it gets closer to a full valuation,” said Cramer.

Tuesday: Palantir Technologies, Vizio

On the day of their IPO in Manhattan, New York City, United States, on September 30, 2020, people walk past a banner with the Palantir Technologies (PLTR) logo on the New York Stock Exchange (NYSE).

Andrew Kelly Reuters

Palantir Technologies

  • Earnings release for the first quarter of 2021: ahead of the market; Conference call: 8 a.m.
  • Projected EPS: 4 cents
  • Estimated Revenue: $ 332 million

The company is loved by the community on Reddit’s Wall Street Bets, Cramer said. “They pride themselves on moving stocks, however, even if fundamentals don’t deserve it … I think this could be another opportunity to buy something. The stock has been around since the mid-20s that they were roving. dropped sharply it’s due, “he said.

Vizio

  • Q1 2021 Results published: After Market: Conference call: 4:30 p.m.
  • Estimated loss per share: 10 cents
  • Estimated Revenue: $ 485 million

“I often think of Vizio in conjunction with red-hot Roku … This stock had cooled down but then rose well after reporting last night,” said Cramer. “I’d say it’s at least worth listening to Vizio for a different perspective on the situation, but I hesitate to recommend it due to the lack of chips.”

Wednesday: Wendy’s, Bumble and GrowGeneration

Wendy’s

  • Earnings release for the first quarter of 2021: ahead of the market; Conference call: 8:30 a.m.
  • Projected EPS: 15 cents
  • Estimated Revenue: $ 445 million

“It was a bad habit to cut earnings and then bounce back. As much as I like it … I think you will probably want to see the quarter before you pull the trigger,” said Cramer.

bumblebee

  • Earnings publication for the first quarter of 2021: after market entry; Conference call: 4:30 p.m.
  • Estimated loss per share: 3 cents
  • Estimated Revenue: $ 165 million

“”Playgroup has reported an amazing quarter this week, so I imagine this online dating competitor Bumble can do the same next Wednesday night. I like Bumble, “said Cramer.

GrowGeneration

  • Earnings publication for the first quarter of 2021: after market entry; Conference call: Thursday 9 a.m.
  • Projected EPS: 7 cents
  • Estimated Revenue: $ 87.1 million

GrowGeneration “has been reported to be increasing,” Cramer said. “I bet it won’t be any different this time, especially as more and more financially troubled states are accepting legalization to pay their bills.”

Thursday: Alibaba, Disney, DoorDash, Airbnb and Coinbase

Attendees visit the Disney + Streaming Service booth at D23 Expo on August 23, 2019 at the Anaheim Convention Center in Anaheim, California.

ROBYN BECK | AFP | Getty Images

Alibaba

  • Q4 2021 results to be published: before the market; Conference call: 7:30 a.m.
  • Projected earnings per share: $ 1.79
  • Estimated Revenue: $ 27.83 billion

“Remember, China is way ahead of us in post-pandemic recovery,” said Cramer. “Alibaba should have some great numbers as Chinese consumers recover from difficult times.”

Disney

  • Q2 2021 Results publication: After Market; Conference call: 4:30 p.m.
  • Projected EPS: 27 cents
  • Estimated Revenue: $ 15.86 billion

“Out of all of this, I think Disney has the best story for the future – I would be a buyer,” said Cramer.

With the Dash

  • Earnings publication for the first quarter of 2021: after market entry; Conference call: 5 p.m.
  • Estimated loss per share: 8 cents
  • Estimated Revenue: $ 994 million

“DoorDash made some amazing partnerships during the pandemic and I think it can make good money now, but maybe not good money because so many people want to eat in person now that they have been vaccinated,” the “Mad Money” – Host said.

Airbnb

  • Earnings publication for the first quarter of 2021: after market entry; Conference call: 5 p.m.
  • Estimated Loss Per Share: $ 1.05
  • Estimated Revenue: $ 718 million

“Airbnb may tell a great story, but it’s really expensive at a time when the market has turned against the top fliers,” said Cramer. “But remember, Airbnb is not a business [travel]. It’s pleasure and pleasure is booming. “

Coinbase

  • Earnings publication for the first quarter of 2021: after market entry; Conference call: 5 p.m.
  • Projected earnings per share: $ 2.98
  • Estimated Revenue: $ 1.81 billion

“It’s a mystery. Business should be booming given the crazy crypto world, but since it came to the public through a dreaded direct listing, we have no idea where the sellers are and what the damn thing is really worth,” Cramer said . “I don’t trust the stock price. I like the story, though.”

Friday: retail sales

“I think you’re going to see a super strong number, a barn burner. If it wasn’t for today’s weak employment number, we might have seen bond yields spike on these retail sales, with pressure on the Fed to tighten,” Cramer said said. “Fortunately, the job report outperforms retail sales, but I’d argue that retail is the real comeback story right now, and that means we’ll likely have more than temporary inflation.”

Disclosure: Cramer’s charitable foundation owns shares in Disney.