Earnings season is right around the corner, and there are some stocks investors should be wary of, according to Piper Sandler. The season unofficially kicks off this week, with JPMorgan's third-quarter results due Friday before the bell, and it ramps up from there. This comes as October has already been a volatile month for stocks – on par with historical trends , especially during election years.
In those years, the index has seen an average decline for October of nearly 1%, per the Stock Trader's Almanac. The S & P 500 fell about that much on Monday but then recovered during Tuesday's session, seeing gains of nearly 1%. September was even more notable.
The S & P 500 – along with the Dow Jones Industrial Average – posted its fifth consecutive winning month, and the Federal Reserve cut interest rates for the first time since 2020 , doing so by a half point. Against this backdrop, Piper Sandler screened for names that are most at risk of missing third-quarter expectations this season in its view. The investment firm looked for stocks that have a history of missing EPS estimates and a higher dispersion in analyst estimates, so there's a lot of uncertainty around the results.
Plus, the stocks have a high correlation to the Purchasing Managers' Indexes, therefore they are highly cyclical at a time when the economy has been in a bit of a lull. Below are some names on the list. Paramount Global made the list ahead of its quarterly results, which are projected to be reported o.
