Goldman Sachs upgrade of large cap banks sent stocks soaring yesterday, helping equities rebound from their first two week drop since July. Technology issues got a jolt from mergers and acquisitions; Nasdaq went up by 20 points to a close of 2068.15.

Last week’s Institute for Supply Management’s (ISM) manufacturing index number disappointed the investors. We got good news from ISM regarding their non-manufacturing index which rose to 50.9% in September from 48.4% in August. That marked the first expansion in a year and that sent the index to its highest reading since May 2008. This is causing lot of confusion among investors. Can we optimistic because of positive change in ISM’s non-manufacturing index OR pessimistic because of negative change in ISM’s manufacturing index change?!

Market is going higher again today. I think this trend will continue until we get earning numbers from leading companies. Samsung expects strong 3rd quarter profit. This is the great news for technology sector worldwide. Yahoo’s earnings announcemnt on October 20th will set the tone for U.S. technology stocks.

U.S. dollar is sinking toward its 2009 lows. A British paper released a story last night that several Gulf Arab states, including Saudi Arabia, Abu Dhabi, Kuwait, and Qatar, held secret meetings with Brazil, China, France, and Russia. The purpose of these meetings were to discuss how to end trading oil in dollars and move to a basket of currencies including the Chinese yuan, the euro, and the Japanese yen. Weakness in the dollar is fueling a strong rally in commodities. Gold is making headlines with a new all-time high!

Related Link: The demise of the dollar

Last week Goldman Sachs, JP Morgan and Citigroup announced earnings that beat the street’s expectations. All of them except JP Morgan traded down even after delivering better news. Bank of America and Wells Fargo are going to report this week.

Bank America reports today before market. Every investor out there is going to watch what they say about TARP, the stress test and their failed acquisitions. Wells Fargo will announce their earnings on Wednesday before market. Wells Fargo has already guided higher so every one is going to focus on Bank of America. Wall Street is expecting a profit of 4 to 5 cents a share from Bank of America compared to 23 cents a year ago.

Capital One is going to report on Tuesday. Capital One serves the high credit risk customers. We have to see whether their consumer credit quality is still declining. If Capital One gives us some positive surprise, the market will rally.

Apart from the banks, we have other major companies that report earnings this week. Apple Inc is going to report Wednesday after market. Investors have questions about whether iPhone sales are doing ok, effect of competition from Blackberry, Mac Sales, etc., Apple’s stock rallied in the past two weeks. We will know whether this rally is sustainable on Wednesday.

UPS is going to report on Thursday before market. It will give us the state of the shipping business. It will also give us the clue about e-commerce trends.

Once upon a time, everyone was eagerly waiting for earnings results from Yahoo. I don’t think anyone cares about them now. Yahoo reports tomorrow. EBay reports on Wednesday. Microsoft reports on Thursday. These results will give us clues about technology sector.

We have to watch for reports from Ford, which reports on Friday before market, to see the signs of recovery in Detroit. In the oil and energy sectors, Schlumberger reports on Friday before market, Conoco Phillips and Occidental report on Thursday before market. Halliburton reports today before market. These results will give us indications about the health of overall economy.

Keep your fingers crossed before you hit the buy button in your online brokerage account!

Related Link: Earnings Season