On Tuesday, the S&P/ASX 200 Index (ASX: XJO) had an underwhelming session. The benchmark index fell 0.2% to 7,264.1 points.
Will the market be able to bounce back from this on Wednesday? Here are five things to watch:
ASX 200 expected to fall
The Australian share market looks set to fall again on Wednesday following a poor night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 18 points or 0.25% lower this morning. On Wall Street, the Dow Jones was down 0.2%, the S&P 500 fell 0.45% and the Nasdaq dropped 0.6%.
Oil prices push higher
It could be a positive session for ASX 200 energy shares such as Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) after oil prices staged a remarkable recovery overnight. According to Bloomberg, the WTI crude oil price is up 0.6% to US$73.60 a barrel and the Brent crude oil price has risen 0.4% to US$77.33 a barrel. Oil prices were down over 2% before rebounding amid news that the U.S. government plans to refill the nation's emergency oil reserves.
Federal budget
A number of ASX 200 shares will be in focus on Wednesday after the Labour government unveiled the federal budget. Among the winners could be Fortescue Metals Group Ltd (ASX: FMG), which looks set to benefit from green hydrogen support, and Wesfarmers Ltd (ASX: WES) for several reasons. Its Officeworks business could benefit from small businesses being able to write off the value of new equipment worth up to $20,000, whereas Kmart and Target could benefit from low-income support.
Gold price rises
Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) will be on watch after the gold price rose overnight. According to CNBC, the spot gold price is up 0.45% to US$2,042.5 an ounce. Traders appear to be betting that today's inflation reading causes rates to rise and volatility and recession risks to increase.
CBA shares rated as a sell
The Commonwealth Bank of Australia (ASX: CBA) share price could be overvalued according to Goldman Sachs. This morning, the broker has reiterated its sell rating and $87.78 price target on the banking giant's shares. Goldman notes: "Cash profit from continuing operations in 3Q23 of c.A$2.6 bn was up 10% vs. 3Q22 and run-rating c.1% behind what is implied by our 2H23E forecasts."
