It's another ugly day for investors with our market threatening to retest last week's more than two-year low of 5001 points after Wall Street took a big spill overnight on fresh concerns about China's economic health.
The futures market is betting on a 1.8% decline in the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) as US stock indices crashed by nearly 3% with European equity benchmarks not far behind on news that China's manufacturing sector shrunk at its fastest pace in three years in August.
That was bad news for most commodities too with the West Texas Intermediate oil price tumbling 10.2% to $US44.19 a barrel as copper dropped 2% to $US2.29 a pound.
Interestingly, iron ore actually rose for the sixth straight session with a 0.7% advance to $US56.59 a tonne.
The iron ore market is not traded on an exchange like oil and copper, and I suspect it could actually be a better gauge of economic strength as there are far fewer traders playing in the iron ore market than for other commodities. This doesn't mean iron ore won't decline with other commodities if the sell-off is sustained, but it does mean that iron ore is less reactionary to news.
Not that it really matters today for BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO). The rise in the steel making ingredient is unlikely to save them from a selloff with their US-listed stocks plummeting 7.5% and 6.5% overnight, respectively.
It won't be just resource stocks that will be the centre of attention. Electrical and furniture retailer Harvey Norman Holdings Limited (ASX: HVN) is going country with the acquisition of 49.9% of dairy farmer Coomboona Holdings. There is a lot of interest in Australian agribusinesses recently but this deal is very interesting move for Harvey Norman. The Motley Fool will bring you a more detailed review of the transaction later today.
Information management group Recall Holdings Limited (ASX: REC) won't be left behind. It too has announced the acquisition of three private US companies to expand into key markets in that country, although no financial details were released.
Travel agent Helloworld Ltd (ASX: HLO) also finds itself in the merger & acquisition spotlight. It said it is in discussions with AOT Group regarding a possible deal for Helloworld to buy the group, but it's still too early to say if the transaction will be successful.
Meanwhile, wealth manger AMP Limited (ASX: AMP) is preparing to join the banks in raising capital to strengthen its balance sheet with the Australian Financial Review reporting that it is looking to sell ASX-listed hybrids to retail investors.
Property manager DEXUS Property Group (ASX: DXS) and energy company Oil Search Limited (ASX: OSH) could find some support today. DEXUS said it will capitalise on the market volatility to buy back 5% of its shares on market, while Goldman Sachs has upgraded Oil Search to "buy" from "neutral" despite the weak outlook for the oil price.
However, brokers can't quite decide what to make of Myer Holdings Ltd's (ASX: MYR) turnaround strategy and capital raising that was announced yesterday. Citigroup upgraded the stock to "neutral" from "sell" but Credit Suisse cut it to "underperform" from "neutral".
The Myer story has plenty more chapters to play out.
