We will start the week on a back-foot as big falls in US and European stock indices along with a decline in commodity markets weigh on sentiment.
The futures market is pricing in a 0.6% drop for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) this morning after Wall Street recorded near 2% losses and European stocks fell close to 3% on an uncertain outlook for US interest rates and the global economy.
Resource stocks look poised to lead today's falls with the West Texas Intermediate oil price sliding 1.5% to $US46.05 a barrel and there's more bad news for our energy stocks.
The International Energy Agency (IEA) said that even if oil was to recover to $US60 a barrel for the next few years, six Australian liquefied natural gas (LNG) projects worth $200 billion will struggle to breakeven, reported the Australian Financial Review.
That's bad news for Santos Ltd (ASX: STO), Origin Energy Ltd (ASX: ORG) and Woodside Petroleum Limited (ASX: WPL) as all three have big LNG projects that are close to completion, although Woodside is least at risk.
It won't be a pretty day for miners either with the copper price tumbling 3% to $US2.3120 a pound and gold dipping 0.3% to $US1,121.40 an ounce.
Weak commodity prices have prompted Rio Tinto Limited (ASX: RIO) to suspend operations at its Quebec titanium mine till late March next year and the stock tumbled 3.8% in the US on Friday.
But it's Westpac Banking Corp (ASX: WBC) that will be front and center as its new chief executive is expected to present his new growth strategy for the bank. Analysts are expecting Brian Hartzer to close branches and make other cost savings measures to lift the bank's profit.
At least one broker believes Westpac is the most attractive in the sector as it has greater potential to drive down costs.
There's also plenty of corporate action news to digest. AGL Energy Ltd (ASX: AGL) will sell half of its stake in the Macarthur wind farm to infrastructure investment manager Morrison & Co, according to The Australian; while Australia and New Zealand Banking Group (ASX: ANZ) may be in talks to sell its 24% stake in Malaysian bank AMMB Holdings to Bank of China, reports The Star.
National Australia Bank Ltd. (ASX: NAB) will also be sharing the spotlight on reports in UK papers that Spanish lender Sabadell is considering making a bid to buy Clydesdale Bank. NAB owns Clydesdale and is planning on divesting the asset through an initial public offer.
Embattled supermarket giant Woolworths Limited (ASX: WOW) is facing calls to divest assets, such as its joint-venture in Caltex service stations, to simplify its business and focus on its struggling core grocery business, according the the AFR.
Could UK-based fund manager Henderson Group plc (ASX: HGG) also make an enticing takeover target? Bank of America says Henderson is one of the most attractive asset managers and this is a sector that is ripe for further consolidation.
Meanwhile, there could be turbulence ahead for our high-flying national carrier Qantas Airways Limited (ASX: QAN) after the International Air Transport Association (IATA) issued a report highlighting concern about the outlook for air freight.
Virgin Australia Holdings Ltd (ASX: VAH) will no doubt be impacted by the report as well.
On the flipside, there might be some buying interest in property stocks for their relatively defensive yield after Morgan Stanley upgraded a number of names in the sector. GPT Group (ASX: GPT) and Mirvac Group (ASX: MGR) got upgraded two full notches to "overweight" from "underweight" by the broker.
