Our market looks poised to extend yesterday's losses ahead of the Australian interest rate decision as Wall Street suffered its worst monthly fall in over three years.
The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) is expected to open 0.6% in the red following Monday's 1.1% loss as the US S&P 500 Index shed 0.8% overnight to take its total decline in August to 6%.
However, investors can at least take heart that the West Texas Intermediate oil price surged again by 6.5% to $US48.16 a barrel and has enjoyed its biggest three-day rise since 1990 of 27%.
The latest bout of optimism comes on the back of reports that The Organisation of the Petroleum Exporting Countries (OPEC) is considering "colluding" with other oil producers to achieve "fair prices" for the commodity and as the US government trimmed its oil output estimates.
Shareholders in Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) won't be the only ones smiling. The iron ore price marked its fifth consecutive day of gains with the Metal Bulletin reporting a 0.3% increase in the steel making ingredient to $US56.21 a tonne.
But iron ore's winning streak won't convince analysts that the rout in the commodity is over given the expected ramp up in production in 2016 and weakening demand from the Chinese economic slowdown.
The Reserve Bank of Australia's (RBA) interest rate decision and accompanying statement could well impact on how we finish the trading day given that record low interest rates have been a big driver for share market gains.
The RBA is expected to keep rates at 2% and investors will be keenly reading its statement for hints on where rates might be headed in the near-term.
Embattled department store Myer Holdings Ltd (ASX: MYR) will also be under the spotlight after it unveiled a "New Myer" strategy as it reported a 21.3% drop in full year underlying net profit to $77.5 million and announced a $221 million two-for-five entitlement offer to fund the turnaround of its business.
It won't be the only struggling retailer in focus either. Shareholders in Woolworths Limited (ASX: WOW) won't be happy to learn that Aldi is doubling its intended store roll-out to 80 in 2016, according to The Australian.
Woolies rival Coles, which is owned by Wesfarmers Ltd (ASX: WES), will also feel the impact but it's the former that will take the brunt of the competitive pressure given its higher cost base. UBS issued a note yesterday on Woolies warning of a further escalation in the grocery price war.
Meanwhile, copper miners OZ Minerals Limited (ASX: OZL) and Sandfire Resources NL (ASX: SFR) could come under pressure. Not only did the copper price drop 0.5% to $US2.3355 a pound overnight but JP Morgan downgraded both stocks to "underweight".
Coincidentally, Bloomberg believes that base metal miners with limited takeover defenses, like "poison pill" provisions, may attract activist investors.
Our market will also be dragged lower by a number of stocks trading without their dividend entitlements today. Companies going ex-div include wealth manager AMP Limited (ASX: AMP), fund manager Perpetual Limited (ASX: PPT), gambling company Tatts Group Limited (ASX: TTS) and hotel owner Mantra Group Ltd (ASX: MTR).
