Investors will be relieved to see our market jump back above the psychologically important 5,000 mark this morning despite falls on Wall Street and further weakness in commodity markets.
It's anyone's guess how we will finish the day though given the extreme intra-day volatility but traders are willing to bet that bargain hunters will be stepping up as Australian equities slumped to a more than two-year low on Wednesday.
The futures market is pricing in a 0.5% jump for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) in opening trade following its 2.1% crash yesterday and we can only hope today isn't a dead cat bounce as investors might be reluctant to make a move ahead of US Federal Reserve chairperson Janet Yellen's speech in Massachusetts later tonight (our time).
Yellen is the primary driver for the latest sell-off after she failed to express confidence in the strength of the US economy and indicated she was concerned about China and market volatility. Thanks Yellen! Let's see how she will dig herself out of this hole.
Local investors will have other things to worry about for now as energy stocks like Woodside Petroleum Limited (ASX: WPL) are unlikely to find much reprieve in the market bounce with the West Texas Intermediate oil price tanking 4.1% to $US44.48 a barrel.
But it will be Santos Ltd (ASX: STO) that will probably take the spotlight as its GLNG project in Queensland is about to start production with a Petronas-owned liquefied natural gas (LNG) carrier reported to be sailing towards our east coast.
The on-schedule start of the project is good news for Santos, but it doesn't really improve the prospects for the embattled debt-laden and cash short company.
Iron ore's 1.6% drop to $US55.30 a tonne last night won't be helping Rio Tinto Limited (ASX: RIO) or Fortescue Metals Group Limited (ASX: FMG) much either, although gold miners like Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could find favour as the gold price recovered 0.6% to $US1,131.50 an ounce.
But I suspect it will be the Big Banks like Commonwealth Bank of Australia (ASX: CBA) that will lead the charge higher as their sell-off on the back of reports of a dividend cut seems overdone. Even the bears acknowledge that their dividends won't come under threat for another two or three years – and frankly, anything can happen by then.
On the earnings news front, building products and property group Brickworks Limited (ASX: BKW) reports its full-year results today, while New Zealand dairy co-operative FONTERRA ORD UNIT (ASX: FSF) should find support after reporting an 182.7% increase in net profit and upgrading its milk price forecast for the current financial year.
Meanwhile, investment holding company Seven Group Holdings Ltd (ASX: SVW) is looking more and more like a private company instead of a listed entity. Its major shareholder Kerry Stokes has increased its hold on the company to 71.03% following the group's share buyback.
Stokes' major shareholdings in energy stocks Drillsearch Energy Limited (ASX: DLS) and Beach Energy Ltd (ASX: BPT) is also fueling speculation that the two companies will merge in the not too distant future as the low oil price has hammered both stocks and increased the need for smaller oil & gas companies to build scale.
Risk-tolerant investors might like to consider buying Drillsearch in anticipation of the deal.
Finally, today is the last day to buy TV and radio broadcaster Southern Cross Media Group Ltd (ASX: SXL) for its fully franked three cents a share dividend. The stock trades ex-div tomorrow.
