Expect profit taking as profits concentrate

The positive results of testing Merck’s new Covid pill wowed investors on Friday, but CNBC’s Jim Cramer believes the market will quickly turn its attention elsewhere.

“Profit season is about to take center stage,” Cramer said on his “Mad Money” show Friday.

As investors hear financial updates from companies like PepsiCo and Levi Strauss & Co over the coming week, Cramer predicts there could be a sell off in some stocks.

“I expect some profit taking next week as investors refocus on earnings that reflect the worst days and the Delta variant,”

Profit taking occurs when investors sell stocks to secure gains after a significant rally in stocks.

Here’s Cramer’s game plan for the next five trading days:

The host of “Mad Money” keeps an eye on Washington where lawmakers are considering a major stimulus package for infrastructure, a deal on social spending and tackling the debt ceiling.

“Come on Monday, I bet we’ll forget the Merck antiviral… as Congress tries to pass an infrastructure bill and raise the debt ceiling,” Cramer said.

Cramer is also researching the box office results of “Venom”.

“I bet it will be a huge success, possibly the biggest since the pandemic, at least from what I’ve heard from Adam Aron, the CEO of AMC,” Cramer said.

Beverage giant PepsiCo is expected to release quarterly financial results before the bell Tuesday.

“While I expect good numbers, I’m also concerned about transportation costs and supply chain issues,” Cramer said. “So while Pep has a surprise in store for you on the upside, I’m afraid the rally will be short-lived.”

Data on the European economy is also expected to be released on Tuesday.

“I have become a lot more constructive about Europe since they overtook us on vaccination rates,” said the host.

Two of Cramer’s favorite names, denim brand Levi Strauss & Co and alcoholic beverage company Constellation Brands, are expected to release their results on Wednesday.

“From Constellation… I’m expecting some really good Corona and Modelo numbers as people start to come out more. I wonder if the delta has stepped in, but now we have to think about the post-delta,” Cramer said. .

The host predicts “fabulous” results from Levi Strauss as the market is in the midst of a denim cycle focused on wide-leg, looser jeans.

“Every few years we catch those times when jeans are getting really popular, and you have to serve it with Levi’s,” Cramer said.

Food company Conagra Brands is expected to share its quarterly financial figures on Thursday.

“Can this packaged food company finally break out of the niche? … I don’t think so. I don’t trust pantry stocks. The industry is plagued with the supply chain,” Cramer said, noting that he would prefer to be invested in reopening stocks instead.

The host called the September non-farm payrolls report due for release Friday “the most important data of the month.”

“We need a Goldilocks job number – not too hot, not too cold – so that [Federal Reserve Chair Jerome Powell] can keep the inflation hawks at bay while we wait for the economy to reopen full time, ”Cramer said.