We can thank the US Federal Reserve for this morning's bruising open to the week as its central bankers triggered renewed worries about the global economy when they voted to keep interest rates on hold.
If the Fed is worried enough about China and market volatility to keep rates at a record low despite further signs of strength in the world's largest economy, then the rest of us better panic as well.
That's is the attitude of investors who sent US and European stocks plummeting on Friday, which in turn is setting the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) up for a huge 1.6% drop at the open.
Energy stocks like Santos Ltd (ASX: STO) are likely to cop a beating as the West Texas Intermediate crude price tumbled 4.7% to $US44.68 a barrel.
The oil price has been particularly volatile and it will be interesting to see how commodity traders react to news that China is planning on more than doubling its strategic petroleum reserves over the next 18-months.
But for today, all eyes will be on Oil Search Limited (ASX: OSH) after the Australian Financial Review reported that Woodside Petroleum Limited (ASX: WPL) is looking to raise $2-3 billion in debt to fund a sweetened offer for Oil Search.
This could mean an extra $1.97 a share for Oil Search investors and the improved offer has been foreshadowed in my article last week when Woodside first made its bid.
But it isn't all bad news for commodities. Gold staged its best one-day rally in about a month when it added 1.9% to $US1137.80 an ounce as investors question if a US interest rate raise is as imminent as the market had once thought, while iron ore continues to march to its own beat as it added 0.6% to $US56.69 a tonne.
The news could give gold producer Northern Star Resources Ltd (ASX: NST) a chance to retest its record high of $2.52 that was set in March this year, but the gain by the steel making ingredient may not be enough to give Rio Tinto Limited (ASX: RIO) or BHP Billiton Limited (ASX: BHP) much of a leg-up as their US-listed stocks fell 3.4% and 2.2% on Friday, respectively.
On the other hand, vertically integrated steel maker Arrium Ltd (ASX: ARI) could find support but it won't be so much because of the commodity price. The Australian reported that the company's grinding media business, Moly-Cop, has attracted over 10 bids and the offers are closer to $2 billion compared with earlier expectations of $1.5 billion.
Beverages group Coca-Cola Amatil Ltd (ASX: CCL) is also likely to attract buying interest after a UK newspaper speculated that it will become a takeover target by global beer giant SABMiller.
SABMiller is being stalked by AB InBev and the former may be looking at making acquisitions of its own as part of its takeover defence, although I have my reservations about Coca-Cola Amatil will actually receive a formal takeover offer.
On the flipside, Middle East-exposed contractors like Worleyparsons Limited (ASX: WOR) and Cimic Group Ltd (ASX: CIM) could come under pressure on news that Saudi Arabia is cutting spending on infrastructure projects due to the falling oil price.
Finally, today is the last day to buy wealth manager IOOF Holdings Limited (ASX: IFL) and debt collector Collection House Limited (ASX:CLH) for their dividends as both stocks will trade without their dividend entitlements tomorrow.
IOOF is paying a fully franked 28 cents a share payout while Collection House is distributing a fully franked 4.7 cents a share payment.
