Can our market hold on to yesterday's strong gains after US and European stocks fell in overnight trade?
Futures traders are betting "yes" – at least to most of Thursday's 1.5% gain with the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) forecast to dip 0.1% into the red this morning.
It will probably be resource stocks that will have to do most of the heavy lifting as commodity prices rallied overnight with Northern Star Resources Ltd (ASX: NST) likely to break to a record high this morning on the back of a 2% jump in the gold price to $US1,153.80 an ounce while the likes of Santos Ltd (ASX: STO) will be buoyed by a 1% gain in the West Texas Intermediate oil price to $US44.91 a barrel.
However, a 1.6% drop in the iron ore price to $US55.30 a tonne will rain on parade of the mining sector, although that may not stop some bargain hunters from dipping their toe into the water as mining equity valuations are low.
Rio Tinto Limited (ASX: RIO) and BHP Billiton Limited (ASX: BHP) could enjoy a boost on a report by US broker Jefferies that the big miners are among the best under its stress test.
Don't rule out gains in financials either following US Fed chairperson Janet Yellen's speech after the US market closed last night.
She made an effort to take her foot out of her mouth by telling investors what they wanted to hear – that the US interest rate is likely to rise 0.25% before end December because the US economy is strong enough to withstand the first rate increase in nine years.
The Fed shook market confidence when it said it was worried that slowing growth in China and market volatility would drag on the US economy. This seemed to be the reason behind the Fed's decision to hold off on raising interest rates this month.
It's funny how investors can't seem to decide what they want. The prospects of higher US rates triggered bouts of market weakness over recent months and now investors are afraid that rates will stay at a record low for longer than anticipated.
One financial stock that could do well today is UK-focused fund manager Henderson Group plc (ASX: HGG) after it was nominated as one of the best European asset managers by Macquarie Group Ltd (ASX: MQG).
A number of other brokers have also highlighted Henderson as a top pick recently, including Bank of America. The stock has performed strongly since its half-year result, as I have foreshadowed in July.
Sleep disorder treatment device maker ResMed Inc. (CHESS) (ASX: RMD) is another that is likely to outperform after Goldman Sachs added the stock to its "conviction buy" list following ResMed's 22% drop in the past six-months.
Shipbuilder Austal Limited (ASX: ASB) will also be in focus after the Australian Financial Review reported that it is considering buying a shipyard in South Australia if it meant that it can win a some multi-million defence contracts.
Meanwhile, Mirabela Nickel Limited (ASX: MBN) has become the latest victim of falling hard commodity prices with the miner calling in administrators due to the crash in the nickel price.
Finally, a number of stocks will trade ex-div on Monday. Today is the last day you can buy online travel booking company Webjet Limited (ASX: WEB), liver cancer treatment developer Sirtex Medical Limited (ASX: SRX) and aged care facilities operator Estia Health Ltd (ASX: EHE) for their dividend.
Webjet will pay a fully franked 7.25 cents a share dividend, while Sirtex and Estia will deliver a fully franked 20 cents and 13.6 cents a share payout.
