5 things to watch on the ASX 200 on Thursday

Commonwealth Bank of Australia (ASX:CBA) and Xero Limited (ASX:XRO) shares will be on watch on the ASX 200 on Thursday…

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On Wednesday the S&P/ASX 200 Index (ASX: XJO) was out of form again and recorded a sizeable decline. The benchmark index fell 0.7% to 7,044.9 points.

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

ASX 200 expected to fall

The Australian share market looks set to tumble lower again on Thursday following a selloff on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 33 points or 0.5% lower. In the United States, the Dow Jones fell 2%, the S&P 500 dropped 2.15%, and the Nasdaq sank 2.7%. A strong inflation reading spooked investors.

Xero full year results

All eyes will be on the Xero Limited (ASX: XRO) share price today. This morning the cloud-based business and accounting software platform provider will be releasing its full year results. According to a note out of Goldman Sachs, it is forecasting sales growth of 16% to NZ$836 million for the 12 months. Goldman expects this to be driven by a 16% increase in ANZ sales and a 17% lift in International sales. This compares to the market consensus estimate of NZ$854 million.

Oil prices rise

It could be a good day of trade for energy producers such as Oil Search Ltd (ASX: OSH) and Woodside Petroleum Limited (ASX: WPL) after oil prices strengthened. According to Bloomberg, the WTI crude oil price is up 0.85% to US$65.84 a barrel and the Brent crude oil price has risen 0.8% to US$69.09 a barrel. Oil prices rose on demand hopes.

Gold price sinks

Gold miners Evolution Mining Ltd (ASX: EVN) and Resolute Mining Limited (ASX: RSG) could come under pressure after the gold price sank lower overnight. According to CNBC, the spot gold price is down 1% to US$1,817.30 an ounce. The gold price tumbled after US inflation rose quicker than expected.

CBA rated as a sell

The Commonwealth Bank of Australia (ASX: CBA) share price is overvalued according to analysts at Goldman Sachs. In response to its third quarter update, the broker has retained its sell rating but lifted its price target by 9% to $80.26. While Goldman acknowledges that its operating performance was strong, it doesn’t believe it justifies the valuation premium.

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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 Xero. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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