CVNA - Why Carvana Stock Was Falling This Week
2023-09-21 15:38:09 ET
It has been a wacky week for Carvana (NYSE: CVNA) as shares of the online used car dealer pulled back in spite of an analyst upgrade and initial optimism about the United Auto Workers (UAW) strike, which has affected production at some plants owned by General Motors , Ford , and Chrysler-parent Stellantis . The initial thinking was that by reducing production, the strike would lead to higher used car prices since there's less competition from new car supplies.
Instead, investors seemed to focus their attention on the updated Fed forecast calling for another rate hike this year and tempering its expectations for rates to come down next year, essentially saying they would stay higher for longer. That is likely to weigh on Carvana as used car demand is sensitive to interest rates. Most buyers finance their used car purchases, and higher rates mean higher payments, making used cars less affordable.
According to data from S&P Global Market Intelligence , Carvana stock was down 15.7% through the week as of 1:52 p.m. ET on Thursday.
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Why Carvana Stock Was Falling This Week