On Monday the S&P/ASX 200 Index (ASX: XJO) started the week on a positive note. The benchmark index rose 0.4% to 5,951.3 points.
Will the market be able to build on this on Tuesday? Here are five things to watch:
ASX 200 expected to rise.
The Australian share market looks set push higher again on Tuesday following a rebound on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 17 points or 0.3% higher this morning. In late trade on Wall Street, the Dow Jones is up 1.1% and the S&P 500 is up 0.7%. However, the Nasdaq is struggling to bounce back and is currently down 0.3%.
Reserve Bank meeting.
The Reserve Bank is due to meet this afternoon to discuss the cash rate. The central bank is widely expected to cut rates at this meeting. The only real unknown is by how much. The economics team at Westpac Banking Corp (ASX: WBC) have forecast a cut down to 0.1%. Whereas the current cash rate futures have priced in an 84% probability of a cut to zero.
Gold price rises.
Gold miners including Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a good day after the gold price climbed higher. According to CNBC, the spot gold price is up 0.75% to US$1,893.40 an ounce. Investors have been buying gold after the pandemic worsened and ahead of a chaotic couple of days because of the U.S. election.
Oil prices rebound.
Energy shares such as Oil Search Limited (ASX: OSH) and Woodside Petroleum Limited (ASX: WPL) could be on the rise today after oil prices rebounded. According to Bloomberg, the WTI crude oil price is up 2.45% to US$36.67 a barrel and the Brent crude oil price has risen 2.4% to US$38.83 a barrel. This follows a tough week for oil prices last week which saw them drop to five-month lows.
Westpac given buy rating.
Analysts at Goldman Sachs have retained their buy rating but trimmed their price target on Westpac’s shares slightly to $19.50 following its full year results. Although the broker notes that Westpac is facing a number of revenue headwinds, it holds firm with its buy rating on valuation grounds. It points out that Westpac’s shares are “trading more than one standard deviation cheap[er] versus the sector on PPOP multiples (17% discount vs. 7% long-run average discount).”
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Returns as of 6th October 2020
More reading
- What is the best US election outcome for ASX shares?
- Westpac (ASX:WBC) reports FY20 result, ASX 200 up 0.4% today
- Why the CSR (ASX:CSR) share price is climbing today
- Top brokers just upgraded the ResMed (ASX:RMD) share price and this other ASX stock
- 3 ASX 200 shares that received broker upgrades last week
Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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