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5 things to watch on the ASX 200 on Wednesday

On Tuesday the S&P/ASX 200 Index (ASX: XJO) bounced back from Monday’s selloff with its biggest daily gain in over two decades. The benchmark index climbed 5.8% to 5,293.4 points.

Will the local share market be able to build on this on Wednesday? Here are five things to watch:

ASX 200 expected to edge lower.   

The S&P/ASX 200 Index looks set to edge lower on Wednesday despite a strong night of trade on Wall Street. According to the latest SPI futures, the benchmark index is expected to open the day 19 points or 0.35% lower this morning. In late trade in the United States the Dow Jones is up 3.7%, the S&P 500 is 4.7% higher, and the Nasdaq index is up 5.2%.

U.S. Government to launch US$1 trillion fiscal stimulus.

U.S. equities raced higher overnight after the White House announced plans to launch a fiscal stimulus package of more than US$1 trillion. This package would include direct payments to Americans, according to CNBC. Treasury Secretary Steven Mnuchin told reporters the government is considering directly sending checks to Americans in the next two weeks.

Oil prices sink lower again.

Energy producers including Oil Search Limited (ASX: OSH) and Santos Ltd (ASX: STO) could come under pressure again after oil prices sank lower again. According to Bloomberg, the WTI crude oil price is down 6.6 % to US$26.80 a barrel and the Brent crude oil price has fallen 4.5% to US$28.69 a barrel. The price war between Saudi Arabia and Russia continues to weigh on prices.

Gold price storms higher.

It could be another positive day for gold miners Northern Star Resources Ltd (ASX: NST) and Saracen Mineral Holdings Limited (ASX: SAR) after the gold price rebounded strongly. According to CNBC, the spot gold price is up 3.4% to US$1,537.40 an ounce. Bargain hunters have been buying gold after a recent plunge.

Austal rated as a buy.

The Austal Limited (ASX: ASB) share price could push higher today after analysts at Goldman Sachs upgraded the shipbuilder’s shares to a buy rating with a $3.73 price target. The broker notes that Austal’s shares at a significant discount to their five-year average EV/EBITDA multiple. It likes the company due to its defensive qualities, minimal customer risk, strong balance sheet, and long-duration earnings visibility.

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As of 17/3/20

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Austal 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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