What Happened?
Shares of personal care company Edgewell Personal Care (NYSE: EPC) jumped 3.3% in the morning session after the stock moved higher amid a broad market rally fueled by hints from the Federal Reserve that interest rate cuts may be on the way. The broader market rallied, with the Dow Jones Industrial Average soaring over 900 points, after Federal Reserve Chair Jerome Powell hinted that interest rate cuts could be forthcoming. During a speech, Powell noted that the “balance of risks appear to be shifting,” which investors took as a strong signal for future monetary easing. This positive sentiment appeared to lift most stocks, including Edgewell.
After the initial pop the shares cooled down to $23.92, up 2.4% from previous close.
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What Is The Market Telling Us
Edgewell Personal Care’s shares are not very volatile and have only had 9 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.
The previous big move we wrote about was 8 days ago when the stock dropped 3.3% on the news that markets pulled back amid hotter-than-expected inflation data. The main concern for investors was the July Producer Price Index (PPI), a measure of wholesale inflation. The higher-than-expected reading suggests that companies could face squeezed profit margins due to rising costs. This also reduces the likelihood of the Federal Reserve cutting interest rates, which could further dampen economic activity. Compounding these inflation fears are multiple reports signaling a weakening consumer.
Edgewell Personal Care is down 28.6% since the beginning of the year, and at $23.92 per share, it is trading 40.5% below its 52-week high of $40.22 from August 2024. Investors who bought $1,000 worth of Edgewell Personal Care’s shares 5 years ago would now be looking at an investment worth $816.77.
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