The market volatility seen in the U.S. and Europe in recent months has also made its presence felt in Canada.

“I don’t think you can talk about Canada without talking about everything else, including Europe, China and the U.S. economy,” said Chris Damas, analyst and principal at BCMI Research. “The S&P/TSX index has been underperforming compared to the U.S. market, because we’re more commodity oriented. We don’t have the technology companies the U.S. S&P500 has with Google and Apple. Our main technology flag-flyers have been doing lousy. Our economic numbers are lagging behind the U.S. a little. Even though the Dow and S&P500 have broken their 50 day averages, the TSX has been below.”

JPMorgan Chase was the first of a slew of banking companies to release its third quarter financial performance, which declined overall from 2010. Many industry observers are expecting more of the same from most other financial institutions as the earnings season progresses. JPMorgan as a whole for the quarter had net income of $4.26 billion on revenue of $24.37 billion. Not only was this down from the second quarter, but it was also a drop off from the $4.4 billion seen in Q32010.

“All things considered, we believe the firm’s returns were reasonable given the current environment,” said Jamie Dimon, chairman and chief executive officer of JPMorgan in a statement.

“The third quarter is history, people will be reading tea leaves in conference calls on guidance,” said Damas. “I don’t see any way that Europe doesn’t impact the fourth quarter and 2012. The JPMorgan results were important, as financials are the Achilles heel since European banks are in such trouble. We also have vulnerability, as our big banks here have expanded internationally.”

As far as the outlook in the coming months, there may be some light at the end of the tunnel.

“Regarding the TMX-Maple situation, the TMX stock is up a little,” said Damas. “Maybe it’s the canary in the gold mine that things will get better.”