Top Stories
Top Stories

Goldman: Earnings season to knock stocks. Here's how to play it

The Goldman Sachs booth on the floor of the New York Stock Exchange
Getty Images

The sideways trading market in the past three months may be about to head down, as a disappointing earnings season will cause investors to sell stocks, according to a new report from Goldman Sachs.

"We see a weak 3Q [third quarter] reporting season coupled with negative 4Q EPS [fourth quarter earnings per share] revisions pushing stocks 2% lower to our year-end target of 2100," warns David Kostin, Goldman's chief U.S. equity strategist.

In the next three weeks, 66 percent of S&P 500 companies are slated to report third-quarter earnings, with consensus expectations pointing to a 1 percent drop in earnings for the . Similarly, revenue figures are projected to increase by 4 percent, but top-line growth will be offset by shrinking margins across most sectors, said Kostin.

Here's how the investment bank advises clients to shelter from the volatility: