Stocks See Profit Booking Ahead of Inflation Data
5:02 pm Thursday, December 09th, 2021
Nasdaq and the S&P 500 were losing ground on Thursday as investors banked some profits after three straight days of gains and turned their focus toward upcoming inflation data and how it might influence the Federal Reserve’s meeting next week.
The S&P 500 energy (-0.9%) and real estate (-0.9%) sectors are the weakest performers, and are both down 0.9%, but the consumer discretionary sector (-0.7%) is one of the heavier drags on the market amid weakness in Tesla (TSLA 1031.56, -37.40, -3.5%).
The health care sector (+0.4%) has traded higher for most of the day, and the financials (+0.1%), utilities (+0.1%), and consumer staples (+0.1%) sectors have recently joined in on the positive action. The former is drawing support from Pfizer (PFE) and CVS Health (CVS).
The FDA expanded the eligibility for the Pfizer-BioNTech (BNTX) COVID-19 booster shot to 16- and 17-year-olds. CVS provided upbeat guidance, boosted its dividend by 10%, and authorized a $10 billion share repurchase program.
The relative strength in the defensive-oriented sectors appears to be corroborating a sense caution in front of tomorrow’s release of the November CPI report, which will likely factor into the Fed’s policy discussions next week. The 10-yr yield is down three basis points to 1.48% despite the lowest level of weekly initial claims (184,000) since Sept. 6, 1969.
Separately, Apple (AAPL) has set an all-time high after the stock was named a Top Pick for 2022 at Morgan Stanley with a Street-high target of $200. AAPL shares are off early highs, though, fitting in with the fatigue narrative after rising 8.2% over the past three sessions.
Initial claims for the week ending December 4 dropped by 43,000 to 184,000. That is the lowest level since September 6, 1969. Continuing claims for the week ending November 27 increased by 38,000 to 1.992 million.
