What Happened?

A number of stocks jumped in the afternoon session after markets continued to rally as a surprisingly subdued inflation report fueled hopes for an imminent interest rate cut from the U.S. Federal Reserve. The July Consumer Price Index (CPI) report showed a year-over-year increase of 2.7%, which was slightly below market expectations. This tamer-than-expected inflation data was viewed by investors as a key signal that price pressures are easing. As a result, the market has strengthened its conviction that the U.S. Federal Reserve will implement an interest rate cut in September. The prospect of lower borrowing costs tends to boost corporate profitability and can stimulate economic activity, creating a more favorable environment for consumer-facing companies and fueling a broad-based market rally.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Household Products company Central Garden & Pet (NASDAQ: CENT) jumped 4%. Is now the time to buy Central Garden & Pet? Access our full analysis report here, it’s free.
• Household Products company Energizer (NYSE: ENR) jumped 3.3%. Is now the time to buy Energizer? Access our full analysis report here, it’s free.
• Shelf-Stable Food company Lamb Weston (NYSE: LW) jumped 3.7%. Is now the time to buy Lamb Weston? Access our full analysis report here, it’s free.
• Shelf-Stable Food company Utz (NYSE: UTZ) jumped 3.4%. Is now the time to buy Utz? Access our full analysis report here, it’s free.
• Shelf-Stable Food company BellRing Brands (NYSE: BRBR) jumped 3%. Is now the time to buy BellRing Brands? Access our full analysis report here, it’s free.

Zooming In On Central Garden & Pet (CENT)

Central Garden & Pet’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

Central Garden & Pet is down 3.1% since the beginning of the year, and at $36.96 per share, it is trading 14.3% below its 52-week high of $43.14 from December 2024. Investors who bought $1,000 worth of Central Garden & Pet’s shares 5 years ago would now be looking at an investment worth $861.54.

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