High-beta stocks face an earnings-week test in mid-October

Traders watching high-beta stocks mid-October have one date range circled: Oct. 12-16. A Sept. 22 MarketWatch column by Mark Hulbert says research has found that the first crowded week of earnings season is one of the few periods when higher-risk shares have, on average, delivered the higher returns predicted by financial theory.

That is a timing argument, not a promise of gains. The same stocks could fall sharply if early corporate results disappoint, according to the MarketWatch report.

Why is Oct. 12-16 important for high-beta stocks?

Hulbert says the first heavy reporting week usually arrives in the second week after a quarter ends, when a sizeable group of large companies releases results. For the third quarter of 2026, he identifies Oct. 12-16 as that window.

The companies expected to report during that week include JPMorgan Chase, UnitedHealth Group, Goldman Sachs, Citigroup, Morgan Stanley and Taiwan Semiconductor Manufacturing, the column says. They are examples of the early large-cap group, not stock recommendations.

High-beta shares tend to swing more than the broader market: they can rise further when markets climb and drop further when markets decline. Low-beta shares generally move less. Beta above 1 is commonly treated as an indication of greater market sensitivity, though it is based on past price moves rather than a forecast, according to Investopedia.

What the research found

Standard capital-asset pricing theory holds that investors should receive higher average returns for accepting higher beta risk. Hulbert cited research by Terry Marsh, emeritus finance professor at the University of California, Berkeley, and Kam Fong Chan, a finance professor at the University of Western Australia, that found the expected link between beta and returns during the first busy earnings week.

For other weeks, the study found no statistically significant average relationship between beta and returns, according to the column. The researchers’ explanation, as reported by MarketWatch, is that results from major companies reporting early in the season can offer a broader read on the economy because their businesses reach across many industries.

That cuts both ways. Better-than-expected reports could favor the more market-sensitive shares, while unexpectedly poor results could make them perform especially badly. Hulbert’s conclusion that traders should take high-beta exposure only in that window is his interpretation of the study, rather than a settled rule for investors.

What remains unanswered

The available report does not give the study’s sample period, portfolio design, return spread, trading costs or out-of-sample results. Those details would be needed to judge whether a calendar-based approach remains workable after expenses.

Beta also cannot assess a company’s valuation, cash flows or company-specific developments. Investors considering a short-term earnings-season trade would still face the possibility that the historical pattern does not repeat.

This story draws on original reporting from MarketWatch.