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:

• Perishable Food company Dole (NYSE: DOLE) jumped 3.8%. Is now the time to buy Dole? Access our full analysis report here, it’s free.
• Shelf-Stable Food company B&G Foods (NYSE: BGS) jumped 4.5%. Is now the time to buy B&G Foods? Access our full analysis report here, it’s free.
• Personal Care company Medifast (NYSE: MED) jumped 4.2%. Is now the time to buy Medifast? Access our full analysis report here, it’s free.
• Personal Care company USANA (NYSE: USNA) jumped 4.1%. Is now the time to buy USANA? Access our full analysis report here, it’s free.
• Beverages, Alcohol, and Tobacco company MGP Ingredients (NASDAQ: MGPI) jumped 3%. Is now the time to buy MGP Ingredients? Access our full analysis report here, it’s free.

Zooming In On B&G Foods (BGS)

B&G Foods’s shares are quite volatile and have had 17 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

B&G Foods is down 39.7% since the beginning of the year, and at $4.30 per share, it is trading 54% below its 52-week high of $9.34 from September 2024. Investors who bought $1,000 worth of B&G Foods’s shares 5 years ago would now be looking at an investment worth $146.86.

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