Those who went overweight on resources stocks will be wearing the biggest smiles this morning even as our market struggles to keep its head above water thanks to falls in US equities overnight.
A 0.4% drop in the US S&P 500 index is offsetting optimism from the decent gains recorded by European stocks and commodities with the futures market pointing to a mere 0.1% gain for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO).
But I suspect we could perform better than what futures traders are anticipating as the drop in US stocks is largely due to a big sell-off in biotech stocks, which do not have much correlation to the Australian stock benchmark.
Energy stocks like Woodside Petroleum Limited (ASX: WPL) are likely to lead the charge higher on the back of a 5.3% surge in the oil price to $US48.73 a barrel as traders bet that falling oil production will ease the supply glut.
Comments by Royal Dutch Shell's chief executive that the first signs of a recovery are starting to appear are fueling the positive sentiment although most experts believe the oil price recovery will be a slow and drawn out process.
But given the close to close to 40% crash in the S&P/ASX 200 Energy (Index: ^AXEJ) (ASX: XEJ) index over the past year, it's understandable that investors will think "flat is the new up".
Shareholders in Origin Energy Ltd (ASX: ORG) might feel the most relieved after the stock took a big pounding yesterday due to its heavily discounted $2.5 billion new share offer. If oil has bottomed, it will help build a platform for a re-rating in the stock.
Gold producers like Newcrest Mining Limited (ASX: NCM) should also enjoy good support as the gold price rallied 1% to $US1,147.25 an ounce on the weakening US dollar. This is the third consecutive session that gold has advanced.
The greenback has been under pressure as the market pushed back its expectations for when interest rates will rise to sometime in 2016. The market was convinced that rates will rise in the world's largest economy before year end, but the weaker-than-expected jobs data has turned that view on its head.
That has bought breathing room for gold and other commodities priced in US dollars as they tend to move in opposite directions to the currency. This could pave the way for resource stocks to run higher into February or March next year.
Outside of resources, Asian property website operator iProperty Group Ltd (ASX: IPP) announced it has acquired Thailand real estate portal Prakard.com for around $2.7 million. iProperty unveiled a record third quarter result yesterday.
Rail freight operator Aurizon Holdings Ltd (ASX: AZJ) will also be in the spotlight as it holds its investor day today. Investors will have their first formal chance to question Aurizon about its dispute with seven of its eight Wiggins Island Rail Project customers. The dispute threatens to shave up to $10 million off its earnings before interest and tax (EBIT) for the current financial year.
Meanwhile, sleep disorder treatment device maker ResMed Inc. (CHESS) (ASX: RMD) could enjoy some support after Deutsche Bank upgraded the stock to "hold" from "sell", although the falling US dollar could dampen some of the enthusiasm as ResMed makes most of its revenue in US dollars.
Finally, today is the last day you can buy shares in sandalwood producer TFS Corporation Limited (ASX: TFS) for its fully franked 3 cents a share dividend as the stock trades ex-div tomorrow.
