Summary

Despite the significant volatility in the financial markets, the first week of October brought slight changes of the major global stock indices. During the whole week, British FTSE250 grew by 0.7%, French CAC40 increased by 0.04% and German DAX declined by 0.2%. In the US, the S&P500 fell by 0.7%, while the NASDAQ and the DJI went down by 0.4%. This time investors focused on macroeconomic data from the US. The readings of the manufacturing ISM (51.5 pts.), the non - manufacturing ISM (57.1 pts.) and the dynamic of the factory goods orders (0.2% m/m) exceeded projections. Nevertheless, the release of data from the American labor market turned out to be quite disappointing. The non – farm payrolls stood at 156K vs 176K expected. Moreover, the unemployment rate rose to 5% in September. Nonetheless, the representatives of the Fed in their commentaries assessed the latest payrolls positively. What is more, some of them reiterated that the interest rates should be raised. Investors learnt the minutes from the last meeting of the ECB as well. It seemed certain that the bank did not intend to change the current ultra – expansionary monetary policy. There were also readings of the PMI’s for the Eurozone. The manufacturing PMI stood at 52.6 pts. and the services PMI amounted to 52.2 pts.. The figures were in line with the market expectations. However, the publication of the retail sales growth rate failed. It stood at 0.6% y/y vs 1.4% expected.

In Poland, this time the market sentiment supported the largest companies. During the whole week, the WIG20 rose by 2.5%. Unlike to the blue – chip index, the mWIG40 fell by 0.4% and the sWIG80 declined by 0.1%. The event of the week was the MPC meeting. Nevertheless, it did not arouse a lot of market emotions – the interest rates remained unchanged. The council emphasized that in the near future there would not probably be any modifications in the monetary policy. On the other hand, the MPC did not exclude the first interest rates raise in 2018. Investors learnt the manufacturing PMI as well. It stood at 52.2 pts. vs 52 pts. projected. In addition, another international institution lowered forecasts for the Polish GDP growth rate. The IMF projected that it would stand at 3.1% in 2016 and 3.4% in 2017.

In the current week it is worth paying attention to the data from the Eurozone: the Sentix index, the ZEW indices and the dynamic of the manufacturing production. In the US, there will be the publication of data on the retail sales, the PPI, the CPI and the minutes from the last meeting of the FOMC. Investors will learn the Polish CPI as well.

Technical analysis

Graph 1: WIG20 daily. Source: Stooq

Last week the WIG20 was dominated by bulls. As a result, the index of the largest Polish companies ended the past week at 1,751 pts.. It is worth paying attention to the volume of trade which maintained at a relatively high level. The blue – chip index was in a sideways trend. It was also confirmed by the RSI oscillator which remained neutral for nearly two months. The picture of the market will probably change if the WIG20 manages to break thepsychological level of 1,800 pts.

Graph 2: Braster daily. Source: Stooq

This time special attention should be paid to Braster. During the whole week, the share price of the company increased by 7.6%. After the significant increases the course was in a sideways trend. In line with earlier announcements, Braster started to product its innovative merchandise last week. It should be reiterated that investors’ expectations were extremely high. However, it does not seem that the share price will be able to break the resistance level at PLN 30, at least until the first sales results. If Braster achieves the expected success, the share price will probably start another upward wave. What is more, the course may break its historical peak (PLN 34.44).

Authors: MM Prime TFI S.A. Investment Management Team

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