You might get to see how high a dead cat can bounce with our market expected to recover some of yesterday's devastating losses as Glencore – the source of the big sell-off – surged and US stocks regained composure in overnight trade.
Swiss commodity trading giant Glencore surged by a record 17% as it reassured investors that its business remains financially sound in the current low commodity price environment, while the US S&P 500 staged a late rally to close 0.1% in the black.
That's enough to bring out the bargain hunters on our market with the futures market predicting a 0.7% gain for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) following Tuesday's 3.8% freefall.
Is the market rout over? Don't bet on it. History shows that the ASX 200 doesn't suffer such a big blow and recover right away.
Further, the index is expected to remain under the psychologically important 5,000 mark despite the expected bounce.
On the other hand, the trigger for yesterday's selloff, namely Glencore, seems weak. As I wrote, if Glencore were to collapse, it would actually be good news for our majors like BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO) because it would ease the oversupplied commodity market and potentially weaken the Australian dollar further as investors rush for safe haven currencies like the US dollar.
There was no further bad news from the world's largest commodity consumer, China, and Bloomberg quoted a Goldman Sachs fund manager saying the local currency could even rise as fears about China are overblown.
Tempering the good news is a 1.4% fall in the iron ore price to $US56.05 a tonne, although the 1.8% advance by the West Texas Intermediate oil price to $US45.23 a barrel could help energy companies Santos Ltd (ASX: STO) and Origin Energy Ltd (ASX: ORG) recover some of their 9-10% loss from yesterday.
In other news, gas pipeline operator APA Group (ASX: APA) may be facing problems in its bid for Energy Australia's Iona gas plant as the competition watchdog is expected to raise concerns about potential transaction costs, according to the Australian Financial Review.
Crown Resorts Ltd (ASX: CWN) is also expected to come under pressure on a report by a broker that warns the situation in Macau could be worse than expected after one of the territory's biggest casino junket operators said it may have to shut down.
The slump in Crown's share price to a three-year low of $9.80 could renew speculation that the company could be taken private.
Meanwhile, Commonwealth Bank of Australia (ASX: CBA) and National Australia Bank Ltd. (ASX: NAB) are believed to be among a number of banks looking to apply the bitcoin blockchain technology to financial instruments even as the major Australian banks are reported to be considering cutting off lending to bitcoin companies.
If anyone doubted whether bitcoin or crypto-currencies have a future, the move by major financial institutions to adopt the technology should put the debate to rest.
Bitcoin IPOs will be an interesting space to watch.
