Despite the major indexes trading near their all-time highs, there are still plenty of stocks that JPMorgan is bearish on in the coming quarter. Stocks managed to pull off a record performance in September — despite the month being traditionally difficult for the market — after the Federal Reserve cut rates for the first time in four years. But stocks may not be in the clear just yet, as historical trends also show October as a choppy month for equities.
FactSet data showed that on average, the S & P 500 has posted a daily move of 1.3% in either direction in October since 1950. Election years also play a role, with the broad market index notching an average October decline of nearly 1% the month before an election, according to the Stock Trader's Almanac.
All in all, while stocks are currently near their all-time highs, there's no guarantee that they'll stay at these levels. Against this backdrop, JPMorgan surveyed its analysts for their top short ideas, or stocks that might underperform going into the fourth quarter. Traders who engage in short selling make their profits by borrowing stocks they believe will underperform and then buying them back at a lower price in the future.
Here are some highlights from the list: Industrial and hardware manufacturer Stanley Black & Decker was one name that made the cut. Shares have risen 9% in 2024, leading to what JPMorgan analyst Michael Rehaut believes is an expensive valuation. Most analysts covering the stock currently have a ho.