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5 things to watch on the ASX on Monday

The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) had a strong finish to the week on Friday and ended with a gain of almost 0.4% to 6,285.9 points.

Will the local market be able to build on this on Monday? Here are five things that could shape the day’s trade:

ASX futures pointing lower.

According to the latest SPI futures, the Australian share market is expected to open the week lower by 0.3% or 18 points on Monday. This follows a soft end to the week on Wall Street which saw the Dow Jones edge lower, the S&P 500 drop 0.1%, and the Nasdaq finish the week with a slight decline.

Microsoft delivers bumper profits.

Data centre operators Macquarie Telecom Group Ltd (ASX: MAQ) and NEXTDC Ltd (ASX: NXT) could be worth watching on Monday after global tech giant Microsoft smashed expectations on Friday when it released its quarterly result. Its shares surged to an all-time high following another blockbuster quarter driven by growth in its legacy software business and Azure cloud computing services. Revenue for its Azure cloud business jumped 89%, which could be a sign that the cloud computing boom is continuing to accelerate, potentially leading to strengthening demand for data centre services.

Aristocrat Leisure shares tipped as a buy.

The Aristocrat Leisure Limited (ASX: ALL) share price could be on the move on Monday after the release of a positive broker note out of Goldman Sachs. The broker has revised upwards its earnings estimates for the gaming technology company to account for the Australian dollar’s depreciation. It has lifted its price target to $35.30 and retained its conviction buy rating.

Medibank shares tipped as a sell.

Unfortunately Goldman Sachs isn’t as positive about Medibank Private Ltd (ASX: MPL). A note released late on Friday reveals that the broker has a sell rating and $2.73 price target on the private health insurer. Its analysts expect Medibank to deliver net profit after tax (post-one offs) of $443 million in August, down 1.5% on the prior corresponding period.

Oil prices rise.

Oil Search Limited (ASX: OSH) shares will be on watch after oil prices continued their recovery on Friday. While the WTI crude oil price only edged slightly higher to US$68.26 a barrel, the Brent crude oil price pushed 0.7% higher to US$73.07 a barrel according to Bloomberg.

Here are three top mid cap shares to watch as well this month. I'm tipping them to be market beaters.

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Teresa Kersten is an employee of LinkedIn and is a member of The Motley Fool’s board of directors. LinkedIn is owned by Microsoft. Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. 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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