Has bad news become good? The string of weaker-than-expected economic data points out of China and the US are spurring speculation for more stimuli from global central bankers and governments.
This is the reason why US and European stocks rallied on Friday, and that in turn is setting the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) up for a 0.5% advance at the open.
But the theory of "bad news being good" will be further tested when China releases its gross domestic product (GDP) reading when the market opens at 10am. Economists on Bloomberg expect a reading of 6.8%, below the previous 7% reading, in part because the Chinese statistics agency is changing the way its accounts for growth to standardise the data interpretation to global standards.
This means weaker growth and that is likely to prompt Chinese authorities to undertake other measures to keep the world's second largest economy humming along – at least that's what the market is hoping.
Such an outcome will give commodities a big boost and would offset Goldman Sachs' warning that the recent rally in commodity-linked stocks will be short lived. The broker isn't yet willing to bank on more Chinese stimulus.
But don't count on iron ore giants like BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO) to lead any morning rally as news that their Brazilian rival Vale is gaining market share could put the sector under some pressure.
Vale is expected to report record quarterly production of 87.9 million tonnes of iron ore later today.
It could be a different story for energy stocks like Woodside Petroleum Limited (ASX: WPL) thanks to the 1.9% increase in the West Texas Intermediate oil price to $US47.26 a barrel. The commodity jumped on news that the number of oil rigs in use in the US fell for the seventh week.
But it's Santos Ltd (ASX: STO) that may steal the limelight in the sector after the Australian Financial Review reported that Quadrant Energy is close to securing credit approval for an acquisition.
Quadrant is a joint venture partner with Santos on a number of projects and is keen on taking full ownership of those projects, although it remains to be seen if Santos will be a willing seller in its quest to shore up its debt-laden balance sheet.
Gold miner Regis Resources Limited (ASX: RRL) is likely to come under pressure today, and it's not only because of the 0.5% drop in the price of the precious metal to $US1,177.30 an ounce on Friday.
At least three brokers, including Credit Suisse, have downgraded the stock to a "hold" or "sell" equivalent following its latest quarterly production report and the close to 50% surge in its share price over the past three months.
Meanwhile, utilities APA Group (ASX: APA) and AGL Energy Ltd (ASX: AGL) are sounding the market for a possible $570 million refinancing deal for the Diamantina power plant project, according to Bloomberg, while investment platform provider HUB24 Ltd (ASX: HUB) will be in focus after it rejected IOOF Holdings Limited's (ASX: IFL) takeover offer for being too low.
Westpac Banking Corp (ASX: WBC) and wine supplier Treasury Wine Estates Ltd (ASX: TWE) will also be sharing the spotlight as both stocks emerge with a trading halt to facilitate their massive capital raisings.
