The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) had a disappointing start to the week and finished the day down by 0.9% at 6,227.6 points on Monday.
Will the market be able to rebound on Tuesday? Here are five things to watch:
ASX futures pointing higher.
According to the latest SPI futures, the Australian share market is expected to open the day higher. At present futures are pointing to the market lifting 0.3% or 17 points at the open following a reasonably positive night of trade on Wall Street. The Dow Jones edged slightly lower, but the S&P 500 was 0.2% higher and the Nasdaq rose 0.3%.
Alphabet smashes expectations.
Google's parent company released its second-quarter results overnight, revealing revenue of US$32.66 billion versus $32.17 billion expected by a Thomson Reuters consensus estimate. This was a 25.6% increase from the prior corresponding period and was driven by its Search business. Though, its Cloud business also performed strongly.
Oil prices slide.
After a strong start to the trading day, oil prices gave back their gains and dropped lower on Monday. This could put pressure on energy shares including Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) today. According to Bloomberg, the WTI crude oil price fell 0.7% to US$67.80 a barrel and the Brent crude oil price edged 0.15% lower to US$72.96 a barrel.
CSL shares have become expensive.
While many in the broker community are positive on CSL Limited (ASX: CSL) even after its impressive share price gain over the last 12 months, not everyone is. According to Australian equities manager T Rowe Price, courtesy of the AFR, CSL is expensive at these levels and the broker has given its shares an underweight rating.
Wesfarmers will be on watch.
On Monday Wesfarmers Ltd (ASX: WES) announced that its planned demerger of the Coles supermarket business will happen in November. Brokers will no doubt be busy updating their recommendations today to reflect these plans. One broker that has been quick to respond is Goldman Sachs, which has retained its buy rating and $50.20 price target.
