J.M. Smucker is a packaged food company that primarily sells through the US retail channel (78% of fiscal 2024 revenue came through its retail pet foods, coffee, and frozen handheld/spreads segments), with the remaining share consisting of Hostess and international (primarily Canada). Retail coffee is its largest category (33% of sales) with brands Folgers and Dunkin’. Pet foods (22% of sales) holds leading brands like Milk-Bone and Meow Mix. Of its remaining, approximately 22% comes from consumer foods, primarily peanut butter and jelly, through brands Jif and Smucker’s. The company acquired Hostess Brands in fiscal 2024 to boost its snack and convenience store presence.

Small- and mid-cap stocks (SMID), despite bursts of outperformance, have underperformed large-caps year to date - as they have over the past five years. But they may be in a better position to generate market-beating returns going forward. SMID companies tend to focus on domestic markets, so their businesses could be less disrupted by the fallout from unrest in the Middle East, the Russian invasion of Ukraine, issues in China, or other geopolitical developments. As well, the prices of SMID stocks generally are lower than the prices of large-caps. SMID stocks can be risky, but despite those risks, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. We estimate that 20% of the U.S. stock market's capitalization is comprised of SMID stocks.

Founded in 1897, The J.M. Smucker Co. is a leading manufacturer of food and beverage products. Its primary products include coffee, peanut butter, fruit spreads, pet food, and pet snacks. Major brands include Folgers, Dunkin' Donuts, Cafe Bustelo, Jif, Smucker's, Uncrustables, Meow Mix, and Milk-Bone. Based in Orrville, Ohio, the company has approximately 9,000 employees. The shares are a component of the S&P 500.

Stocks are up but the mood feels cautious. We will see if markets can shake off last week's gloom. Wall Street and economists are waiting for the key CPI report due on Wednesday. Action this week will be somewhat focused on next week and the much-anticipated Fed rate meeting. Argus forecasts a 25-basis-point cut at that meeting, followed by two more 25 bps rate cuts this year, so three cuts in total by year-end.