Every year during the middle of October we often get the start of the 3rd quarter earnings season. This traditionally comes during the start of the 4th quarter for the markets, which history has shown is often the best quarter for stocks. Past performance does not guarantee future results.
Normally, our markets are very interdependent on watching and reacting to the earnings reports of the big bellwether companies. The Dow for example can often experience great swings in either direction based upon how wall street interprets a company’s EPS or revenue, but more importantly the guidance that the CEO’s give for the future.
Today, our markets are reacting to headline risk out of Europe. Until the politicians and various leaders of European Union countries adapt a unified solution, the market will continue to have very little faith in a good potential outcome. With a market that is asking to be proven wrong, even the slightest sense of a unified long term solution may potentially cause the markets to respond positively.
So, even though we may be in the heart of earnings season it appears our markets here at home are going to continue to wait for additional news headlines out of Europe with baited breath.
