Summary

Last week the meeting of the ECB’s Governing Council was in the spotlight. This time the representatives of the ECB did not surprise investors – interest rates remained at the current level and the scope of the QE was not change. During the conference Mario Draghi reiterated that the inflation rate accelerated. On the other hand, he paid special attention to the ECB’s readiness to continue expansionary monetary policy until the price growth stabilizes. As a result, the ECB did not significantly affect market sentiment. Investors also learnt the values of the PMI’s for the Eurozone. The industrial PMI stood at 51.5 pts. in March vs 51.6 pts. in February. The services PMI grew from 53.1 pts. in February to 53.2 pts. in March. Moreover, the data from European and American construction markets disappointed investors. In the US, the value of the Philadelphia Fed index failed as well. The number of initial jobless claims was lower than the market expectations. It may have confirmed the strength of the US labor market. Furthermore, it is worth paying attention to the oil price. Despite the lack of a signed agreement on the production limit, the price of the US WTI crude oil took off by 8%, while European Brent crude oil grew by 5%. During the whole week, the DJI rose by 0.6%, the S&P500 went up by 0.5% and the NASDAQ declined by 0.7%. In Europe, German DAX increased by 3.2% and French CAC40 took off by 1.7%. British FTSE250 went down by 0.2%.

Major Polish stock indices ended last week in positive territory. The WIG20 rose by 0.2%, the mWIG40 grew by 1.8% and the sWIG80 soared by 1%. This time economic data releases did not help Polish indices to grow. The dynamic of the industrial production stood at 0.5% y/y in March vs 6.7% in February. What is more, the dynamic of the retail sales amounted to 0.8% y/y in March vs 3.9% in February. In addition, the PPI growth rate was lower than expected. Last week the earnings season began on the WSE. Companies will present financial statements for the first quarter of 2016. PKN Orlen was the first to publish its financial results. They turned out to be lower than expected. Nevertheless, the EBITDA did not fail.

In the current week, investors will learn the confidence indices and the unemployment rate in the Eurozone. It is worth paying attention to the reading of German Ifo index as well. Nonetheless, the data from the US will be in the spotlight – the Conference Board index, the Chicago PMI and the GDP growth in the first quarter of 2016. In addition, there will be the FOMC meeting. Perhaps interest rates will not be changed. It should be also noted that there will not be any conferences with the Fed’s representatives. What is more, investors will not learn any new economic projections. In Poland, there will be a release of the unemployment rate.

Technical analysis

Graph 1: WIG20 daily. Source: Stooq.

The index of the largest companies ended last week at 1,943 pts.. Once again, the level of volumes was quite low. The first part of the week brought some increases. Subsequently, the market was dominated by bears. Thus, during the whole week, the WIG20 moved slightly towards north. The RSI oscillator was neutral. The market was indecisive. It waited for an incentive which would have helped to end the consolidation.

Graph 2: Amrest daily. Source: Stooq.

One of the most interesting shares in the past week were those of Amrest – the price grew by 10.4%. Certainly, the takeover of the German Starbucks chain helped Amrest’s shares to grow. Nevertheless, the course has been in an upward trend for over a year. Moreover, despite a negative divergence indicated by the RSI oscillator, the share price moved towards north. Therefore, it reached a historical peak. It is worth emphasizing that the RSI oscillator pointed out an overbought again. On the other hand, the MACD oscillator indicated a buy signal. Upcoming sessions may bring a correction. The nearest support stands at PLN 209. Nonetheless, the medium – term prospects seem to be promising.

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

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