Expect profit-taking as earnings come in focus

Positive trial results from Merck‘s new Covid pill wowed investors Friday, but CNBC’s Jim Cramer believes the market will quickly turn its attention elsewhere.

“Earnings 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 in the week ahead, Cramer anticipates there could be a sell-off in certain stocks.

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

Profit-taking is when investors sell shares to lock in gains after a stock rallies significantly.

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

“Mad Money” host Jim Cramer’s game plan for the trading week of Oct. 4

Monday: Infrastructure bill update, ‘Venom’ box office results

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

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

Cramer is also looking out for box office results from “Venom.”

“I bet it’s going to be a huge hit, maybe the biggest since the pandemic, at least based on what I heard from Adam Aron, the CEO of AMC,” Cramer said.

Tuesday: PepsiCo earnings, European economic data

Beverage giant PepsiCo is set to report quarterly financial results before the bell Tuesday.

“While I expect good numbers, I’m also worried about freight costs and supply chain issues,” Cramer said. “So even if Pep gives you an upside surprise, I fear the rally will be short lived.”

Data on Europe’s economy is also slated for release Tuesday.

“I’ve become much more constructive on Europe ever since they leapfrogged us on vaccination rates,” the host said.

Wednesday: Levi Strauss & Co and Constellation Brands earnings

Two of Cramer’s favorite names, denim brand Levi Strauss & Co and alcoholic beverage company Constellation Brands, are scheduled to report earnings Wednesday.

“From Constellation … I’m expecting some very good Corona and Modelo numbers as people are beginning to go out more. I do wonder whether delta cut in but now we’ve got to be thinking about post-delta,” Cramer said.

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

“Every few years we catch on these periods where jeans become wildly popular, and you have to serve it with Levi’s,” Cramer said.

Thursday: Conagra Brands earnings

Food corporation Conagra Brands is set to share quarterly financial numbers Thursday.

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

Friday: September jobs report

The host called September’s nonfarm payroll report set to be released Friday “the most important piece of data of the month.”

“We need a Goldilocks employment 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 reopened full time,” Cramer said.