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5 things to watch on the ASX on Wednesday

On Tuesday the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) had a disappointing day of trade and finished the day with a decline of 0.6% to 6,097.8 points.

Will the benchmark index be able to bounce back with a gain today? Here are five things that could impact trade on Wednesday.

ASX futures are pointing lower.

According to the latest SPI futures, the Australian share market is expected to open the day lower by 7 points or 0.1% following sizeable declines on Wall Street overnight. The Dow Jones fell 0.8%, the S&P 500 dropped 0.7%, and the Nasdaq ended the day 0.8% lower.

U.S. treasury yields widen.

One driver of the decline on Wall Street was a positive U.S. retail sales data release which has led to the market predicting that the Federal Reserve will raise rates three more times this year. This took 10-year Treasury Yields to 3.08% and the U.S. dollar index to its highest level in 2018. Bond proxies such as Transurban Group (ASX: TCL) could potentially come under pressure today.

The gold price is falling.

The rising U.S. dollar and widening bond yields also hit the gold price. The spot gold price is currently down almost 1.8% to US$1,290 an ounce. This could put the shares of gold miners including Newcrest Mining Limited (ASX: NCM) and Resolute Mining Limited (ASX: RSG) under pressure on Wednesday.

Myer releases its quarterly sales update.

Embattled department store Myer Holdings Ltd (ASX: MYR) is expected to release its sales update for the March quarter this morning. A broker note out of Citi yesterday reveals that its analysts expect Myer to report a 4.9% drop in quarterly sales. The broker was concerned that the warm start to winter could be an issue for the retailer, putting it on a path towards breaching its debt covenants.

Telstra will be on watch again.

The Telstra Corporation Ltd (ASX: TLS) share price will be on watch again on Wednesday. The telco giant’s shares have now shed over 10% of their value this week following the release of a trading update. The market appears to be unconvinced that Telstra’s 22 cents per share dividend is sustainable. Citi put a sell rating and $2.70 price target on Telstra’s shares yesterday.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited and Transurban Group. 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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