Investors in the financial markets are waiting now for a number of companies to release the results for the third quarter of this year, whereas expectations signal that companies continued to earn profits during the period, as economic conditions continued to improve, while companies continued to reduce costs in order to survive the current weak economic conditions.

Johnson & Johnson will start today’s earnings, whereas expectations signal that the company eared $1.13 a share down by 3.25% from the prior reported estimate of $1.15 a share profits during the second quarter, meanwhile, Altera Corp will also release the results for the third quarter, where it’s expected that the company will report earnings of $0.19 a share.

Intel Corp will also release its results for the third quarter, as it’s expected that Intel will report earnings of $0.276 a share compared with the prior reported estimate of $0.20 a share during the second quarter of this year.

More companies will be reporting their results during the week, whereas a number of major banks such as JPMorgan Chase, Goldman Sachs, Bank of America, and several others will be releasing their results as well, however, it seems that investors are waiting strong results from companies, and accordingly we should expect high fluctuation levels in stock markets.

Stock markets have been enjoying a long rally that lasted for almost seven months now, and the rally will probably continue should earnings manage to beat expectations, as I’m very sure that bulls won’t waste such an opportunity, and that means that we should expect the rally to continue and gains to be extended further.

Yet should earnings fail to meet expectations, we should be waiting for a strong correction to take place, as the correction is going to come sooner or later, however, investors are waiting for the spark to ignite that correction, where the only two reasons for this spark in my opinion seem to be either bad earnings from companies, or bad fundamentals from the U.S. economy.

The U.S. economy has been showing signs of improvement over the past period, however the economy is still under pressure, whereas rising unemployment and tightened credit conditions are still expected to weigh down on economic activity, and that means that we are not out of the woods yet, and accordingly investors should still be careful…