On Monday the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) finished the year on a disappointing note with a 0.15% decline.
Will the market be able to bounce back and start the year on a high? Here are five things to watch:
ASX futures flat.
According to the latest SPI futures, the ASX 200 is expected to open the year flat on Wednesday. This is despite a positive end to the year on Wall Street on Monday. The Dow Jones was up 1.15%, the S&P 500 rose 0.8%, and the Nasdaq also climbed 0.8%.
Oil prices higher.
Energy shares such as Oil Search Limited (ASX: OSH) and Woodside Petroleum Limited (ASX: WPL) could start the year on a positive note after oil prices rose on Monday. According to Bloomberg, the WTI crude oil price rose 0.2% to US$45.41 a barrel and the Brent crude oil price pushed 1.1% higher to US$53.80 a barrel.
Rates on hold until 2020.
According to the Australian Financial Review’s quarterly survey of economists, the median forecast reveals that economists still believe the next move for the cash rate is up. However, economists don’t see this change being made until June 2020. Great news for borrowers, but not so for savers.
Australian dollar edges higher.
The Australian dollar has edged slightly higher to 70.5 U.S. cents after a spot of weakness in the U.S. dollar. Despite this small rise the local currency has lost 10% of its value against the greenback over the last 12 months. This will be good news for company’s generating significant revenues in the United States such as Appen Ltd (ASX: APX), Aristocrat Leisure Limited (ASX: ALL), and Treasury Wine Estates Ltd (ASX: TWE).
Economic data releases.
There’s a reasonable amount of economic data due to be released today. One key highlight will be the CoreLogic dwelling prices for the month of December. In addition to this, December’s manufacturing PMI data for China and the U.S. will drop later today.
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited. The Motley Fool Australia owns shares of Appen 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.