We are finally set for a decent rally today on the back of 1% plus gains by US and European equities and higher commodity prices.
Traders are tipping a 0.8% jump-start for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) although how we finish up will depend largely on the Australian jobs data to be released at 11.30am.
It may sound a little crazy, but we could be at a point where economic data either needs to be really good or bad to illicit a positive response from the market. Robust data will show our economy will avoid a recession and bad data will force the Reserve Bank of Australia to cut interest rates again soon – and we all know how the market is addicted to rate cuts.
But middle-of-the-road data really won't mean anything.
We won't need to worry about downside risks in early trade though and it's the resource stocks that are likely to lead the charge at the market open with iron ore snapping a three-day losing streak to jump 1.7% to $US65.39 a tonne, while the West Texas Intermediate (WTI) rallied 2.1% to $US61.43 a barrel and copper advanced 1.2% to $US2.75 a pound.
But optimism towards BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO) could be tempered by credit rating agency Fitch's move to revise the outlooks for both to "negative". This implies a likely credit downgrade in the near term.
Elsewhere, grocery and auto parts distributor Metcash Limited (ASX: MTS) could enjoy its first day of gains in five days after The Australian reported that the group is considering moving forward plans to spin-off its auto division.
Property investment company Goodman Group (ASX: GMG) will also be in the spotlight as it holds its investor day, while advertising and marketing group STW Communications Group Ltd. (ASX: SGN) was upgraded to a "buy" from "hold" by Credit Suisse following its investor update yesterday.
Finally, listed fund manager Platinum Asset Management Limited (ASX: PTM) is also exciting investors after it announced it is planning on launching another listed fund that will focus on Asian equities.
