5 things to watch on the ASX 200 on Wednesday

Here’s what to watch on Wednesday…

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On Tuesday the S&P/ASX 200 Index (ASX: XJO) was out of form and edged lower. The benchmark index ended the day 0.2% lower at 7,474.5 points.

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

ASX 200 futures pointing higher

The Australian share market is expected to push higher on Wednesday following a strong night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 12 points or 0.15% higher this morning. On Wall Street, the Dow Jones rose 0.8%, the S&P 500 stormed 0.8% higher, and the Nasdaq pushed 0.55% higher.

CBA shares given sell rating

The Commonwealth Bank of Australia (ASX: CBA) share price is overvalued ahead of its results release according to analysts at Goldman Sachs. This morning the broker retained its sell rating and $81.87 price target. Although the broker expects a strong result and a special $3.5 billion or 200 cents per share dividend, it isn’t enough for a more positive rating. Goldman continues to believe there are better options elsewhere in the sector.

Oil prices fall

Energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could come under pressure on Wednesday after a poor night for oil prices. According to Bloomberg, the WTI crude oil price is down 0.9% to US$70.61 a barrel and the Brent crude oil price is down 0.6% to US$72.47 a barrel. This was driven by concerns that rising COVID-19 cases could reduce demand.

Afterpay share price likely to end winning run

The Afterpay Ltd (ASX: APT) share price could end its winning run and trade lower on Wednesday. Overnight the Square share price ran out of steam and dropped 1%. Given that the Square-Afterpay deal is an all-scrip one, the two shares are intrinsically linked. This means when Square’s shares rise, the Afterpay share price should also. And vice versa when it declines.

Gold price falls

Gold miners Evolution Mining Ltd (ASX: EVN) and Newcrest Mining Limited (ASX: NCM) will be on watch after the gold price dropped overnight. According to CNBC, the spot gold price is down 0.5% to US$1,813.60 an ounce. Traders were selling gold ahead of some important economic data in the United States. This jobs data could determine how soon the US Federal Reserve starts to reduce its economic support.

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Motley Fool contributor 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 and has recommended AFTERPAY T FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. 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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