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  • Professor Andrea M. Armani, University of Southern California
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  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

Why Central Garden & Pet (CENT) Stock Is Trading Up Today

CENT Cover Image

What Happened?

Shares of pet company Central Garden & Pet (NASDAQ: CENT) jumped 3.1% in the afternoon session after the broader market rallied as U.S. Federal Reserve Chair Jerome Powell signaled the potential for future interest rate cuts. During a speech in Jackson Hole, Federal Reserve Chair Jerome Powell suggested the possibility of lowering interest rates in the coming months. This signal of a less aggressive monetary policy sparked a widespread rally across U.S. stock markets, with the S&P 500 and Nasdaq composites posting significant gains. The positive sentiment was driven by the prospect that lower interest rates could stimulate economic activity and improve corporate borrowing costs. Central Garden & Pet's shares moved higher in line with the broader market's enthusiastic response to the macroeconomic news, rather than any company-specific developments.

After the initial pop the shares cooled down to $36.46, up 2.4% from previous close.

Is now the time to buy Central Garden & Pet? Access our full analysis report here, it’s free.

What Is The Market Telling Us

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.

The previous big move we wrote about was 9 days ago when the stock gained 4% on the news that 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.

Central Garden & Pet is down 4.4% since the beginning of the year, and at $36.46 per share, it is trading 15.5% 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 $874.97.

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