Steel yourselves for another ugly day Fools! A plunge in the iron ore price and big falls on Wall Street are conspiring to send our market to retest June's six-month low this morning.
The futures market is pricing in a 0.8% fall for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) at the open following the index's 2% belting yesterday.
Panic selling in the iron ore market forced the commodity to plummet 10% to its lowest level since the global financial crisis in 2009 of $US44.59 a tonne and you can expect some of this panic to hit higher cost producers like Fortescue Metals Group Limited (ASX: FMG) and BC Iron Limited (ASX: BCI).
Mining giants BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO) won't be spared either as their US-listed stocks fell around 4% each overnight.
Is there a silver lining to the commodity shakeup? BHP is firming up as the favorite to buy Barrick's Zaldivar copper mine and the volatility could help it secure a better deal.
On the flipside, a 1% bounce in the gold price to $US1,163.50 an ounce and copper's 2.1% recovery to $US2.49 a pound could help Newcrest Mining Limited (ASX:NCM) and OZ Minerals Limied (ASX: OZL) buck the downtrend.
But it will be Northern Star Resources Ltd (ASX: NST) that will steal the spotlight after the gold miner announced record free cashflow of $183 million for 2014-15 after enjoying a solid June quarter.
Nonetheless, there won't be many places to hide from the expected early sell-off, which could be exacerbated by an expected rise in Australia's June unemployment to 6.1%. The data will be announced at 11.30am this morning.
Good news is few and far between today. Adding to the negative sentiment, fuel distributor Caltex Australia Limited (ASX: CTX) is reported to be preparing a profit downgrade, while steel maker BlueScope Steel Limited (ASX: BSL) and miner South32 Ltd (ASX:S32) are locked in a dispute over coal supply contracts, according to the Australian Financial Review.
One stock that could do better than most is embattled grocery distributor Metcash Limited (ASX: MTS) on news that its largest franchisee, Ritchies Stores, is forecasting its first profit growth in four years.
Sleep disorder treatment device maker ResMed Inc. (CHESS) (ASX:RMD) might also get some love from investors after Bloomberg reported that it has acquired CareTouch 360 although no financial details were disclosed.
Further, the fall in the Australian dollar to just above US74 cents will help boost earnings for the US-exposed company.
Rail freight operator Aurizon Holdings Ltd (ASX: AZJ) will be in focus as well after it announced that it has renewed a coal haulage contract with Anglo American and Mitsui. The new performance-based long-term contract is more flexible for the coal miners as the industry is under intense pressure from falling commodity prices.
