Summary

Certainly, the second week of June was not successful for investors. The global market sentiment was bearish. Thus, most of the major stock indices ended last week in negative territory. In Europe, German DAX declined by 2.7%, French CAC40 went down by 2.6% and British FTSE250 deteriorated by 1.4%. In the US, the DJI increased by 0.3%, the NASDAQ slipped by 1% and the S&P500 decreased by 0.3%. Investors focused on the upcoming referendum in the Great Britain. There were plenty of indications which confirmed a high probability of the Brexit. What is more, the UEFA European Football Championship began on Friday. Due to the high risk of the terrorist attacks, the activity of the investors on the European stock exchanges can be a little bit lower, especially at the beginning of the event. Moreover, the latest economic data from the Eurozone surprised positively. The final reading of the GDP growth for the first quarter of 2016 stood at 1.7% vs 1.5% expected. In addition, the value of the Sentix index amounted to 9.9 pts. vs 7.5 pts. expected. In the US, data on the wholesale inventories and sales did not fail. On the other hand, the unit labor cost increased by 4.5% q/q and the nonfarm productivity declined by 0.6% q/q. It is also worth paying attention to the oil price. Lately, it broke the psychological level of 50 dollars per barrel. Subsequently, the price of the black gold started to fall.

Last week major Polish stock indices reported slight changes. Nonetheless, the market was bearish. During the whole week, the WIG20 went down by 0.6% and the sWIG80 decreased by 0.5%. Unlike to them, the mWIG40 took off by 0.3%. Investors did not learn any new data from the Polish economy, whereas there was a meeting of the MPC. The interest rates remained unchanged. It seemed that the council was not in favour of further cuts in interest rates. On the other hand, it was difficult to notice any hawkish attitudes of the MPC’s members. It should be reiterated that it was the last time when the MPC meeting was chaired by Marek Belka who would be replaced by Adam Glapinski. Moreover, a new project of the presidential act concerning the loans denominated in Swiss francs was published. Nevertheless, due to its very general nature, the project remained unnoticed.

The highlight of the current week will be the meeting of the FOMC. The interest rates will probably remain unchanged, whereas investors will pay special attention to the conference with the participation of Janet Yellen. In addition, on Friday there will be a public appearance of Mario Draghi, the president of the ECB. The current week will also bring many new readings of macroeconomic data from the US, the Eurozone and Poland.

Technical analysis

Graph 1: WIG20 daily. Source: Stooq.

In the first part of the week the blue – chip index grew dynamically. Subsequently, the WIG20 started to move towards south. Therefore, the index of the largest companies ended last week at 1,782 pts.. As a result, there was a consolidation. The level of trading volume was very low once again, although investors got used to this problem. The RSI oscillator remained neutral. A strong support stands at 1,747 pts., while the nearest resistance stands at 1,852 pts.. It should be also noted that the holiday’s time is coming. This period is characterized by lower activity of the investors on the financial markets. Thus, a stalemate in the market can be expected.

Graph 2: Resbud daily. Source: Stooq.

Last week the Resbud shares rallied extremely strongly. The price increased by 47% during the week ending 17th June. The course has been in an upward trend since the beginning of the year. Last growths caused that the share price reached a year’s peak of PLN 2.5. Moreover, the dominance of the bulls was confirmed by high level of trading volume as well. On the other hand, the RSI oscillator and the stochastic oscillator indicated an overbought. Thus, a correction can be expected. The nearest support stands at psychological level of PLN 2.

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

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