On Monday the S&P/ASX 200 Index (ASX: XJO) started the week in sensational form. The benchmark index stormed 1.3% higher to 5,461.2 points.
Will the market be able to build on this on Tuesday? Here are five things to watch:
ASX 200 expected to fall.
It looks set to be a weaker day of trade for the Australian share market on Tuesday. According to the latest SPI futures, the ASX 200 is expected to fall 20 points or 0.4% at the open. This follows a mixed night of trade on Wall Street which saw the Dow Jones fall 0.45%, the S&P 500 trade flat, and the Nasdaq index jump 0.8%.
Oil prices drop lower.
Energy producers such as Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) could be under pressure today after oil prices dropped lower. According to Bloomberg, the WTI crude oil price fell 0.8% to US$24.54 a barrel and the Brent crude oil price dropped 3.1% to US$30.97 a barrel. Oil prices dropped lower despite Saudi Arabia announcing plans to cut its production further.
Gold price tumbles.
Gold miners including Evolution Mining Ltd (ASX: EVN) and Newcrest Mining Limited (ASX: NCM) will be on watch after the gold price tumbled lower. According to CNBC, the spot gold price fell 0.75% to US$1,701.01 an ounce. Investors were buying the U.S. dollar ahead of gold on second wave fears.
Incitec Pivot to return from its trading halt.
The Incitec Pivot Ltd (ASX: IPL) share price will be on watch today when it returns from its trading halt. The chemicals company placed its shares in a trading halt on Monday after the release of its half year results and the launch of a $600 million capital raising. Incitec Pivot reported earnings before interest and tax (EBIT) of $159 million, up 34% on the prior corresponding period. In respect to its capital raising, it is aiming to raise its $600 million at $2.00 per new share. This represents an 8.7% discount to its last closing price.
Cochlear rated as a sell.
The Cochlear Limited (ASX: COH) share price is overvalued according to analysts at Goldman Sachs. In response to its update on Monday which revealed that sales were down 60% in April because of the pandemic, Goldman Sachs has reiterated its sell rating and $156.00 price target. It commented: "Whilst elective surgeries appear to be resuming ahead of our expectations, the trajectory of recovery also appears to be shallower."
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. The Motley Fool Australia has recommended Cochlear Ltd. 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.
