Coming Up On Wall Street

Good morning and welcome to October. It is 58 degrees and cloudy rainy here in Upstate NY. I really can't recall a period in this area where it rained so much. This could be a deal breaker for me, I need more sun. There's a lengthy list of things to do to the exterior of this old house before the snow flies and the weather is not cooperating. Such is life. On the other hand, its better to have rain than none.

Wall Street saw the end of the third quarter on Friday. As you know the markets saw a significant drop during this quarter as the world economy primarily led by Europe went further out of control.

In two weeks third quarter corporate results will start coming through the pike. This will be the key to how the indexes will respond during the next several weeks.

Essentially there are two lines of thought about how the results will look. One line says they will look a little ugly because of Europe's mess and a problematic slowdown with economic powerhouse China. Essentially the idea here is that corporate America's overseas activity will be weak. With this scenario we would see the indexes drop and probably also suggest the arrival of our double dip recession. The other line of thought has corporate third quarter results fairing okay since these people now know how to make their bottom line work in austere conditions. They have had a few years of practice with a foul depression in place.

Once again its sink or swim time.

Reuters: Europe, China woes fuel earnings worries

The euro zone's debt crisis and weakness in China have fueled investor concern that the global economy could tip back into recession...


A disappointing third-quarter earnings period, which begins the second week of October, could only trigger more losses...


Other strategists said the dramatic cost-cutting that U.S. companies started in the 2008 financial crisis will help to keep bottom-line earnings numbers relatively healthy.