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Investing.com -- Investors should consider purchasing inexpensive stocks with strong histories of exceeding both revenue and earnings expectations as the third-quarter reporting season approaches, according to Evercore ISI strategists led by Julian Emanuel.
The strategists note that with the S&P 500 already trading at elevated valuation multiples and investors preparing for tariff negotiations between the United States and China, stock reactions to earnings reports will likely be "varied and violent."
On the other hand, the strategists caution that stocks which have frequently missed earnings and revenue estimates in previous quarters while maintaining relatively high valuations are likely to underperform during this earnings season.
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