December\u2019s Consumer Price Index (CPI) report indicates that inflation remains steady, but not at the desired pace for markets and the Federal Reserve. Core consumer prices, excluding food and energy, increased by 0.2% monthly and 2.6% annually, their slowest rise since March 2021.<\/p>\n
When including all categories, CPI rose by 0.3% monthly and 2.7% yearly, with food prices notable for a 0.7% monthly increase and a 3.1% yearly rise. Used car prices decreased by 1.7% monthly (unadjusted) and 1.1% (seasonally adjusted), potentially benefiting Cars.com and Carvana, both major online used car marketplaces.<\/p>\n
Cars.com\u2019s stock is priced at $12 per share with a forward earnings multiple of 5X and holds a Zacks Rank #3 (Hold). Projections suggest a 33% rise in EPS by fiscal 2026 to $2.35, though it has a history of missing earnings expectations.<\/p>\n
Carvana has seen its stock surge by 6,000% over three years, achieving a $450 share price and 64X forward earnings. It’s expected to post a 245% rise in FY25 EPS to $5.49, with a further 33% increase projected for 2026.<\/p>\n
Meat and poultry prices rose almost 7% year-over-year, with beef and veal costs up 16% annually. Tyson Foods suffers from cattle shortages and rising costs, unable to pass these on fully to consumers, and holds a Zacks Rank #4 (Sell). EPS projections for Tyson have lowered for FY26 and FY27.<\/p>\n
The December 2025 inflation report shows a mixed but useful picture for us. While overall inflation is sticky, the cooling in core prices suggests the Federal Reserve may stay on hold, but the drop in used car prices is the most immediate signal. This trend seems to be holding, as the Manheim Used Vehicle Value Index has posted another small decline in the first two weeks of January 2026.<\/p>\n
For Carvana, with its earnings report coming on February 18th, we should consider positioning for a positive surprise. Given the stock’s high price of over $450 and its elevated implied volatility, purchasing bull call spreads is a cost-effective way to play this. The continued high short interest, which we see is still over 15% of the float, could amplify any upside move on good news.<\/p>\n
Cars.com is a different angle on the same trend, representing more of a value play. The company has a history of missing earnings expectations, which creates risk, but its low share price makes call options relatively cheap. With earnings on February 26th, we could purchase March calls as a leveraged bet on a potential rebound, especially since recent filings show some modest insider buying in early January, countering some of the negative sentiment we saw in 2025.<\/p>\n
On the other hand, the CPI data confirmed ongoing problems for Tyson Foods. The report’s highlighting of a nearly 7% yearly rise in meat prices directly reflects the margin squeeze TSN is facing from severe cattle shortages. Looking back, we know this is a multi-year problem stemming from drought conditions that reduced herds back in 2023 and 2024.<\/p>\n
The most recent USDA cattle reports from late 2025 confirmed that placements into feedlots are still at decade lows, meaning this supply issue is not resolved. We also saw news last week that Tyson temporarily shuttered a smaller processing facility, citing cattle supply constraints. This tells us the pain is continuing into the current quarter, so buying puts on TSN seems like a logical move.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Inflation holds steady; used car prices fall, benefiting Carvana and Cars.com; Tyson struggles with rising costs.<\/p>\n","protected":false},"author":62,"featured_media":17021,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-39247","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\n\t\t