All good things come to an end and that could well sum up today’s trade with our market expected to break its six-day winning streak, as US and European equity markets tumbled and gold fell for the ninth consecutive day.
Traders are betting that profit takers will rule the day with the futures market tipping a 0.5% drop for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) after the index chalked up a 5.2% rise since the start of the month.
Things aren’t looking good for gold and its producers like Newcrest Mining Limited (ASX: NCM) and friends with the precious metal extending losses by 0.3% to $US1,103.50 an ounce.
As Bruce Jackson pointed out, gold has lost its lustre and it doesn’t help that the crisis in Europe appears to be averted, at least for now, and the US dollar is expected to strengthen further later this year as interest rates in that country rise. Both are negatives for the yellow metal.
The 0.6% drop in the iron ore price to $52.10 a tonne will also weigh on market sentiment and it’s BHP Billiton Limited (ASX: BHP) that will be in the spotlight as it is the miner’s turn to hand in its quarterly production results.
The mining giant’s fourth quarter attributed iron ore output came in at 60 million tonnes compared with analysts’ expectations of 58.9 million tonnes, although management is forecasting petroleum production to fall 7% in 2015-16 from the previous year.
Base metals miner South32 Ltd (ASX: S32) is also expected to hand in its quarterly today and this will be the first production report it releases as an independent entity since its demerger from BHP.
Building materials supplier Boral Limited (ASX: BLD) will also be in focus as it announced a trading update and said that underlying net profit will range between $240 million and $250 million thanks to strong earnings in June and higher-than-expected property sales.
Investors will be eyeing gas utility DUET Group (ASX: DUE) as it resumes trading today. DUET went into a trading halt to undertake a capital raising to fund its acquisition of Energy Developments Limited (ASX: ENE).
Big bank stocks like Commonwealth Bank of Australia (ASX: CBA) and Australia and New Zealand Banking Group (ASX: ANZ) could also come under pressure on speculation that profitability for the sector will fall significantly following the Australian Prudential Regulation Authority’s order for the banks to lift their capital reserves.
On the corporate action front, copper miner OZ Minerals Limited (ASX: OZL) is mulling a bid for Anglo-American’s copper assets in Chile, according to The Australian; while the Australian Financial Review reports that port operator Asciano Ltd (ASX: AIO) has made it into the second round of bidding for the Port of Darwin.
Asciano is a takeover target and you can read more about it here.
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Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited, Commonwealth Bank of Australia, and South32 Ltd. Follow me on Twitter - https://twitter.com/brenlau
The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.