We should be able to regain all of Friday's losses this morning as investors write off a chance of a US interest rate hike this year and commodity prices rallied on the back of a weaker US dollar.
Interest rates in the world's largest economy are likely to stay lower for longer after the release of a weaker-than-expected jobs number, which also pushed the greenback lower.
That's good news for equity investors as record low interest rates have fueled a six-year bull run for the asset class and the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) is predicted to jump 1.2% at the open after falling by a similar amount on Friday.
It was only a few short weeks ago that the market was pricing in a 100% chance of a US interest rate hike by December, but now it has essentially ruled that out till early in the New Year on news that the US economy added 142,000 jobs in September, well under the 200,000 number forecast by economists.
But if our market rallies and holds the gains for the day, it will be done on light volumes as New South Wales is closed for the Labour Day holiday.
This means you shouldn't read too much into today's price action, especially given that most professional investors will be sitting on their hands ahead of the Reserve Bank of Australia's rate decision tomorrow.
This shouldn't stop energy stocks like Santos Ltd (ASX: STO) from rallying though as the West Texas Intermediate oil price jumped 1.8% to $US45.54 a barrel on news that the number of oil rigs in operation in the US has fallen – indicating falling future supply.
The spotlight will also fall on Woodside Petroleum Limited (ASX: WPL) and Oil Search Limited (ASX: OSH) after the Australian Financial Review reported that Woodside is in no rush to improve its offer for its rival and that the offer currently tabled is at a "full price".
Meanwhile, gold miners like Newcrest Mining Limited (ASX: NCM) should enjoy support with the price of the precious metal jumping 2.2% to $US1,138.60 an ounce on the US dollar weakness but it will be interesting to see how the other miners perform.
While copper rose 0.9% to $US2.3255 a pound in sympathy to the market, iron ore suffered a 5.2% crash to $US53.14 a tonne. This will prompt investors to question if the iron ore rally we enjoyed last month has come to an end and if the commodity will drop back towards $US40 a tonne as some analysts are expecting.
Coincidentally, BHP Billition Limited (ASX: BHP) may delay the sale of hybrid securities to raise cash due to the recent market turmoil, according to the Sunday Times. This could further sap investor confidence in the world's largest miner and it doesn't help that Societe Generale has downgraded BHP to "hold" from "buy" on Friday.
Elsewhere, Australia and New Zealand Banking Group (ASX: ANZ) will also be in focus as it will announce the sale of its Esanda car and boat finance division this week, according to the AFR.
Shareholders in Origin Energy Ltd (ASX: ORG) will also be relieved to hear that the vertically integrated energy company has received good support for its fundraising efforts with 92% of eligible institutional investors taking up their share entitlement, which will raise $1.35 billion for the company.
Finally, today is the last day to buy dairy co-operative FONTERRA ORD UNIT (ASX: FSF) if you want its unfranked 13.62 cents a share dividend as the stock trades ex-div tomorrow.
