Goldman Sachs Names 'Tactical Trades' for 'Unusually Volatile' Earnings Season

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Goldman Sachs Names 'Tactical Trades' for 'Unusually Volatile' Earnings Season
Credit: © Reuters.

By Senad Karaahmetovic

Goldman Sachs strategist John Marshall warned clients that the upcoming earnings session is likely to yield unusually high volatility for single stocks.

Whether the company delivers a beat or miss will be “increasingly relevant this quarter as growth slows,” Marshall told clients in a note.

On a positive note, “high fear priced for earnings sets stocks up for relief rallies on earnings-day,” Marshall added.

The strategist added that macro flows indicate there is an upside risk for equities.

“Our analysis of nine statistically significant flow variables suggests the S&P 500 should be 6% higher than current levels. Strong ETF flows have continued, but professional investors have reduced risk over the past week.”

A team of equity strategists at Goldman Sachs came up with the list of 25 “tactical trades” - companies where GS is most out-of-consensus for the coming quarter and expect shares to move.

Some of the names included in the ‘positive’ list are: Mattel (NASDAQ: MAT ), Pioneer Natural (NYSE: PXD ), CrowdStrike (NASDAQ: CRWD ), Atlassian (NASDAQ: TEAM ), and Datadog (NASDAQ: DDOG )

On the other hand, Goldman Sachs strategists see a downside to estimates for companies like Coinbase (NASDAQ: COIN ), Ralph Lauren (NYSE: RL ), and eBay (NASDAQ: EBAY ).

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