Investors will wonder if our market will be able to resist the negative offshore leads and to post another day of gains as a fall on Wall Street and weaker commodity prices weigh on sentiment.
Futures traders don't think it can, at least not in early trade, and are pricing in a 0.4% drop in the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO).
But we have managed to pull a turnaround a few times before, including yesterday when the ASX 200 defied the naysayers to finish 0.2% higher after dropping as much as 0.8% during lunch time trade.
I don't think energy stocks like Woodside Petroleum Limited (ASX: WPL) will be helping much in any potential turnaround today though as the West Texas Intermediate oil price tumbled 2.3% to $US46.22 a barrel on news that US crude inventories had risen by the most in six months.
There will be little cheer from our mining giants too as the iron ore price fell for the third day towards the $US50 a tonne mark as Citigroup warns that the steel making ingredient could crash to $US40 a tonne by March next year due to a cut in Chinese steel production.
Just about all steel makers in China are losing money due to the economic slowdown in that country and the country's second largest steel mill is predicting that steel output could fall by 20%.
The news will weigh on Australia's largest iron ore producer Rio Tinto Limited (ASX: RIO) but it's BHP Billion Limited (ASX: BHP) that could suffer the brunt of the sell-off after Citigroup downgraded the stock to "neutral" after it cut its earnings forecast for the miner in the wake of its quarterly production report yesterday.
Another miner that will be in the spotlight is South32 Ltd (ASX: S32) as it is the diversified miner's turn to unveil its September quarter output. Shareholders will hope management will deliver some good news to help reverse the stock's 30% odd slump since it separated from BHP.
Copper miners OZ Minerals Limited (ASX: OZL) and Sandfire Resources NL (ASX: SFR) will also be in the spotlight following reports that they are among companies interested in bidding for Glencore's Cobar mine.
Outside of resources, conglomerate Wesfarmers Ltd (ASX: WES) is expected to release its quarterly sales update but it is Woolworths Limited (ASX: WOW) that the market will be nervously eyeing as Wesfarmers' Coles supermarket chain has been outperforming Woolworths and investors are worried that the bleeding at Woolies isn't slowing.
Coincidentally, Woolworths is likely to ditch its rewards scheme with Qantas Airways Limited (ASX: QAN) as the frequent flyer program is costing the supermarket giant too much cash, according to the Australian Financial Review.
Another stock that is likely to come under selling pressure today is hotel and resorts operator Mantra Group Ltd (ASX: MTR) after UBS downgraded the stock to "neutral" from "buy" on valuation grounds. Shares in Mantra have surged 43% since January and the stock is hovering close to a record high.
