The S&P 500 index futures three-day winning straight streak came to an end in Thursday’s session. On a closing basis, the 161 handle rally in such a short time span attracted some profit-taking and for a few good reasons.
First of all, on Friday the government will release Consumer Price Index data for November and a hot number will not bode well for markets. Along these lines, the reading may further enhance the Fed’s “hawkish” tone that was unveiled last week. With a Fed meeting looming next week, investors will gain a better understanding of the Fed’s plan to combat inflation and how many interest rate hikes may be in store for 2022 and 2023.
Finally, let’s not forget the quadruple with expiration next Friday and the unwinding of many futures and options contracts.
While the index was able to go green during premarket trading, it did not come close in the regular session. Just before 2 PM EST, the index made its final attempt to go positive but was turned back at 4694.75 vs. Wednesday’s closing price of 4699.
Heading into the final five minutes of the session, it appeared that the index was going to trim the losses for the day, but sellers engulfed the index. As a result, it swooned 15 handles in a matter of minutes and closed near the low for the session. The total damage for the day was 32.25 handles at a closing price of 4666.75.
The flight to safety was exhibited by the top gainers in the index both being defensive issues. UnitedHealth Group Inc. (NYSE: UNH) made a new all-time high and closing high by adding $4.46 or 0.95% to close at $473.32. That percentage gain was equaled by Johnson & Johnson (NYSE: JNJ) which gained $1.56 to close at $165.90.
Those were solid gains compared to the cash index which shed 0.72%.
Tesla Inc (NASDAQ: TSLA) is showing it is not immune to the assault on issues with high price-to-earnings ratios as it was the biggest loser of the top components. For the session, the issue declined $65.16 or 6.1% to close at $1003.90.
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