Our market is poised to give up most of yesterday's gain on the back of weaker commodity prices and a surge in the Australian dollar.
The futures market is pricing in a 0.51% fall in the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) this morning following its 0.7% post-budget rise on Wednesday.
Iron ore dipped 0.5% to $US62.58 a tonne, according to the Metal Bulletin, while the West Texas Intermediate (WTI) crude oil price slipped 0.4% to $US60.50 a barrel.
It isn't expected to be a good day for the likes of Rio Tinto Limited (ASX: RIO) and Santos Ltd (ASX: STO), but gold miner Newcrest Mining Limited (ASX: NCM) should be able to build on yesterday's 2.8% gain as the price of the precious metal rallied to a five-week high.
The spot gold price is up 2.2% to $US1,218 an ounce in overnight trade as the US dollar weakened.
This pushed the Australian dollar to US81.1 cents and that will weigh on stocks with large US dollar exposure. This includes building products company James Hardie Industries plc (ASX: JHX), blood products supplier CSL Limited (ASX: CSL), logistics group Brambles Limited (ASX: BXB) and sleep disorder treatment device maker ResMed Inc. (CHESS) (ASX: RMD).
Any dip in CSL's share price should be seen as a buying opportunity, but ResMed has more things to worry about than the dollar.
Its US-listed stock crashed 15% last night on a reported link between higher death rates and the use of its sleep device in clinical trials. Bank of America has also downgraded the stock to "neutral" from "buy".
However, the higher Australian dollar is not bad news for everyone. Retailers, which got a boost from the federal budget on Wednesday, will be smiling.
No, not JB Hi-Fi Limited (ASX: JBH) as it sources products locally, but home improvement chains like Masters and Bunnings, which are owned by Woolworths Limited (ASX: WOW) and Wesfarmers Ltd (ASX: WES), respectively.
Unfortunately for Woolworths, this piece of good news is likely to be overshadowed by news of a potential board shake-up.
Shareholders are unhappy about the group's underperformance and are pushing for changes, according to the Australian Financial Review. I would be avoiding this stock until some of the dust settles.
Copper and gold miner Sandfire Resources NL (ASX: SFR) is likely to face some pressure today too, as the AFR reports that POSCO is looking to sell a 15.2% stake in the company.
Liver cancer treatment developer Sirtex Medical Limited (ASX: SRX) will also be hogging the spotlight after it released findings from a study done by the American Society for Clinical Oncology.
On the earnings front, utility company AusNet Services (ASX: AST) is expected to post its full year profit results, while agri-business company Graincorp Ltd (ASX:GNC) is scheduled to release its half year earnings.
