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5 things to watch on the ASX on Thursday

James Mickleboro

It was a disappointing day of trade for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) on Wednesday. The benchmark index finished the day lower by 0.5% at 6,023.5 points.

Will things be better for the local market on Thursday? Here are five things that could have a say in matters:

ASX futures are pointing lower.

With SPI futures pointing lower at 7.30am EST, it looks as though it will be another disappointing day of trade on Thursday. SPI futures indicate that the market will open the day down by 0.1% or 5 points. This follows heavy declines on Wall Street which saw the Dow Jones Industrial Average fall 0.5%, the S&P 500 drop 0.4%, and the NASDAQ finish 0.1% lower.

U.S. Federal Reserve raises interest rates.

As was widely expected, the U.S. Federal Reserve has lifted interest rates by 25 basis points to between 1.75% and 2%. Fed Chairman Jerome H. Powell stated that “In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 1-3/4 to 2 percent. The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation.” The Fed also suggested that there would be two more rate hikes in 2018.

Bond proxies will be on watch.

The U.S. 10-year treasury bond rose above the key 3% mark following the Federal Reserve’s rate hike. This could put pressure on shares that are considered bond proxies such as Sydney Airport Holdings Pty Ltd (ASX: SYD) and Transurban Group (ASX: TCL). Especially given the outlook for more rate hikes in 2018 than previously expected.

Incitec Pivot shares could be on the rise.

An announcement out of Incitec Pivot Ltd (ASX: IPL) after the market closed on Wednesday could give shareholders a reason to smile today. According to the release, Incitec Pivot has been awarded an explosives products and services supply contract with Fortescue Metals Group Limited (ASX: FMG). The contract will last until December 23 and is expected to positively impact net profit after tax by a total of $54 million through to FY 2022.

Oil prices push higher.

Despite President Trump tweeting that oil prices are too high, it hasn’t stopped them from continuing to advance. According to Bloomberg, WTI crude oil has risen 0.4% to US$66.62 a barrel and Brent crude oil is up over 0.8% to US$76.52 a barrel.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Sydney Airport Holdings Limited and Transurban Group. 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.