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5 things to watch on the ASX on Wednesday

On Tuesday the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) dropped lower for the third day in a row following heavy declines on international markets. The benchmark index finished the day down 0.2% at 6,197.6 points.

Will the local market be able to bounce back strongly on Wednesday? Here are five things that could shape the day ahead.

ASX futures are pointing lower.

According to the latest SPI futures, the Australian share market is expected to open the day lower by 0.2% or 12 points. This is despite a positive night of trade on Wall Street that saw the Dow Jones Industrial Average rise 0.2%, the S&P 500 climb 0.4%, and the NASDAQ push 0.5% higher.

Oil prices surge higher.

Energy shares such as Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could rebound strongly from yesterday’s declines after oil prices surged higher again. According to Bloomberg, the WTI crude oil price rose 3.4% to US$70.38 a barrel and the Brent crude oil climbed 2.1% to US$76.28 a barrel. Oil prices jumped after the U.S. State Department said it will require companies to cut all oil imports from Iran to zero within the next five months.

Base metals on the decline.

Global trade war tensions have led to further declines for many base metals overnight in London. The benchmark copper price closed the day 0.6% lower at US$6,713 a tonne, having traded close to a three-month low at one stage. Aluminium and zinc prices were also in the red. Because of this, Rio Tinto Limited (ASX: RIO) and OZ Minerals Limited (ASX: OZL) shares could come under pressure today.

TPG Telecom rated as a sell.

The shares of TPG Telecom Ltd (ASX: TPM) have been tipped as a sell by analysts at Goldman Sachs. According to the note, Goldman thinks that TPG Telecom is facing competitive pressures across each of the markets it operates in (Mobile, Fixed, and Enterprise). It has placed a $4.70 price target on its shares.

Market update released by McMillan Shakespeare.

The shares of McMillan Shakespeare Limited (ASX: MMS) will be on watch on Wednesday after the salary packaging company released a market update after the ASX closed on Tuesday. That update revealed the exit from its Money Now point of sale motor vehicle consumer finance business, a further asset impairment of $18 million to $24 million after tax in relation to the continuing Retail Financial Services business, and confirmation that FY 2018 underlying net profit after tax is expected to be $93.6 million.

Bonus. Here are four shares to watch in FY 2019. I'm tipping them to be market beaters.

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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 TPG Telecom Limited. 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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