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5 things to watch on the ASX 200 on Monday

On Friday the S&P/ASX 200 Index (ASX: XJO) was out of form and dropped lower. The benchmark index fell 0.3% to 5,864.5 points.

Will the market be able to bounce back from this on Monday? Here are five things to watch:

ASX 200 expected to drop lower.

According to the latest SPI futures, the ASX 200 is poised to start the week with a decline. Current futures contracts are pointing to a 36-point or 0.6% decline at the open. This follows a disappointing end to the week on Wall Street on Friday which led to the Dow Jones falling 0.9%, the S&P 500 dropping 1.1%, and the Nasdaq index tumbling 1.1%. This was the third week of declines in a row for Wall Street and due largely to further weakness in the tech sector.

Oil prices mixed.

Energy shares such as Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) will be on watch today after a mixed night of trade for oil prices on Friday. According to Bloomberg, the WTI crude oil price rose 0.35% to US$41.11 a barrel and the Brent crude oil price dropped 0.35% to US$43.15 a barrel. Despite this mixed finish, oil prices were up 10% over the week.

Tech shares on watch.

It could be a tough day for locally listed tech shares such as Afterpay Ltd (ASX: APT) and Xero Ltd (ASX: XRO) on Monday after their U.S. counterparts continued to slide. The tech-heavy Nasdaq index tumbled 1.1% on Friday night following a reasonably heavy decline from Apple. The tech giant’s shares are now down over 17% month to date.

Gold price pushes higher.

The shares of Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could be on the rise today after the gold price pushed higher. According to CNBC, the spot gold price rose 0.6% to US$1,962.10 an ounce on Friday night. This led to the precious metal recording its second weekly gain in a row. A weakening U.S. dollar has been supporting the gold price.

A2 Milk given conviction buy rating.

The A2 Milk Company Ltd (ASX: A2M) share price could be going higher from here according to one leading broker. Analysts at Goldman Sachs have retained their conviction buy rating but trimmed the price target on the infant formula company’s shares slightly to $20.40. The broker notes that its shares are trading on notably lower multiples compared to the last five years. This is despite it having a very positive growth outlook over the coming years.

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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 AFTERPAY T FPO and Xero. The Motley Fool Australia owns shares of A2 Milk. 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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