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The US market was closed overnight for the labour day national holiday, but across the sea in Europe, markets closed lower as investors questioned economic risks in the region, reignited by concerns about the energy supply from Russia.

What to watch today:

• Despite the negative session in Europe, the SPI futures are suggesting that the ASX200 will open 0.2% higher.
• The big focus today is the RBA’s September cash rate decision, where it’s widely expected the central bank will increase rates for the fifth consecutive month. Consensus is expecting another 50 basis point hike, which would take the official cash rate from 1.85% to 2.35%. So stay tuned for the announcement at 2:30pm AEST.
• In commodities:
  • Oil prices jumped, extending gains as it was confirmed that OPEC will cut production targets by about 100,000 barrels per day from October.
  • The gold price traded flat at US$1,709 an ounce, as investors remained cautious of the US Federal Reserve’s rate hike path following a mixed jobs data report. The report showed that US employers hired more workers than expected in August, but moderate wage growth and a rise in the unemployment rate suggest that the labor market is starting to loosen.
  • The spot iron ore price traded 1% lower to US$98 a tonne.
• There are nearly 30 stocks going ex-dividend today, including BlueScope Steel (ASX:BSL), CSL (ASX:CSL), Nickel Industries (ASX:NIC), Northern Star Resources (ASX:NST) and Origin Energy (ASX:ORG). So, we may see the share prices of these stocks decline today as investors take their profits.
• If you hold Magellan Financial Group (ASX:MFG), Bell Financial Group (ASX:BFG) or GWA Group (ASX:GWA) you will receive your dividend payment today.

Trading Ideas:

• Goldman Sachs has retained its Neutral rating on Telstra (ASX:TLS) with a price target of $4.40. Goldman Sachs has been reviewing the telco giant and hasn’t seen enough yet to upgrade its shares. At its current share price of $3.89, Goldman Sach’s price target of $4.40 implies about 13% share price growth in a year.
• Trading Central has a bearish signal on The Reject Shop (ASX:TRS) indicating that the stock price may fall from its close of $4.20 to the range of $3.67 – $ 3.77 in the next 33 days according to standard principals of technical analysis.