Summary

The second week of December did not bring us a lot of economic data. German industrial production in November rose by 0.2% vs 0.7% expected. The eurozone’s GDP revision did not surprise and indicated a growth of 1.6%. The number of applications for unemployment benefits in the US was higher that it was predicted. What is more, American retail sales in November grow by 0.2% vs 0.3% expected. However, this data did not affect the fluctuations of the major indices. It should be pointed out that global financial markets were waiting for Wednesday’s Fed decision on interest rates. Nevertheless, the futures market indicated that there was a 80% probability of a interest rates raise. It seemed that the change in a monetary policy had been already discounted in the prices. However, during the conference Janet Yellen will probably refer to the future path of monetary policy what can affect financial markets. Furthermore, the industrial commodity crisis impacted on stock markets - Wall Street ended the week in the red. The DJI fell by 3.3%, the S&P500 went down by 3.8% and the NASDAQ decreased by 4.1%. Similar results were recorded by European financial markets. French CAC40 deteriorated by 3.5%, German DAX depreciated by 3.8% and British FTSE250 fell by 2.8%.

Polish stock market ended the week in the red again. Santa Claus decided not to bring growth in the Polish market. The reason for such hopeless situation was still political uncertainty. The constant political quarrels, reckless and striking in the Polish economy plans did not foster the stock market. In addition, results of global financial markets did not help the Warsaw Stock Exchange. Because of these circumstances it was hard to expect rises. The WIG20 fell by 5.9%, the mWIG40 decreased by 3.6% and the sWIG80 went down by 2.5%.

The coming week will be full of important events and data readings. On Monday there will be a publication of data on industrial production in the eurozone. What is more, there will be a conference of the ECB’s president. On Tuesday investors will learn the CPI in the US and Poland and the ZEW index for Germany. Nevertheless, Wednesday seems to be a crucial day for investors. Firstly, there will be a release of preliminary PMI for the eurozone and then the publication of some important data from the US economy. The icing on the cake will be the FOMC decision on interest rate raise. Furthermore, investors will learn how the employment and the salary in Polish enterprise sector have changed. On Thursday, the CSO will publish data on retail sales and industrial production. Moreover, Germany will release the Ifo index.

Technical Analysis

Graph 1. WIG20 daily. Source: Stooq

The fifth day of December brought the hope of recovery but it was dashed very quickly. It was another a weak week for Polish stock market. The WIG20 continued a downward trend and bottomed out. Lately, there were also extremely high volumes. Unfortunately, they caused decreases. The index of the largest companies went down by 15% since the parliamentary elections. However, it is worth noting that the RSI oscillator was definitely below the thirty-point mark That mean it can show a buy signal, which probably will not appear until the political risk reduces.

Graph 2. PCC Rokita daily. Source: Stooq

In spite of depreciating Polish stock exchange we can find out some companies that did not follow the main indices. Because of major investments, PCC Rokita got the investors’’ attention. The share price reached a peak and stood at PLN 47. However, it should be noted that the RSI oscillator indicated a sell signal. Therefore, investors can expect the share price will break through the support line. This probably means that share price is going to go down. Moreover, some fundamental data on the company showed a sell signal too.

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

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