Summary

The past week was marked by significant volatility in major global stock exchanges. In Europe, the market sentiment was extremely bearish. During the whole week, French CAC40 declined by 3.5%, German DAX went down by 2.8% and British FTSE250 fell by 0.2%. Meanwhile, the US stock indices managed to end last week in positive territory – the NASDAQ rose by 2.3%, the S&P500 went up by 0.5% and the DJI increased by 0.2%. Investors focused on economic data from the US. The readings disappointed once again. The dynamic of the retail sales stood at -0.3% m/m vs -0.2% projected. The manufacturing production growth rate amounted to -0.4% m/m vs -0.3% expected. On the other hand, the reading of the CPI surprised investors positively. The result of 1.1% y/y exceeded the projections (1%). It was very important argument in favor of monetary tightening by the Fed. As a result, in the eyes of investors, the probability of the interest rates raise increased. It was also confirmed by the Friday’s appreciation of dollar against euro. Moreover, it is worth paying attention to the Swiss National Bank and the Bank of England. The banks did not make any changes in their monetary policy last week. In addition, there were some interesting economic data releases from the Eurozone as well. The dynamic of the manufacturing production stood at -0.5% y/y vs -0.6% expected. The reading of the CPI turned out to be in line with projections – the index amounted to 0.2% y/y.

The situation on the WSE remained unchanged – the WIG20 ended last week in negative territory once again. It declined by 1.1%. Nevertheless, small and medium – sized companies continued to rise. During the whole week, the mWIG40 took off by 1.7% and the sWIG80 increased by 0.3%. Investors learnt the CPI which remained at a very low level (-0.8% y/y). Furthermore, there was a publication of the average wages growth rate. It stood at -1.8% m/m and 4.7% y/y. In the past week a lot of market emotions were aroused by the Polish politicians as well. The government announced the last stage of the Ministry of Treasury’s liquidation. There was also information that Energa, Enea, Tauron and PGE would form a new company - ElectroMobilityPoland. The entity would be responsible for preparing the appropriate conditions for the development of electromobility in Poland.

The event of the current week will be the meeting of the FOMC. The council will make a decision on the interest rates on Wednesday. Nonetheless, attention should be also paid to the latest economic data from the Eurozone, especially to the readings of the preliminary PMI’s. Today, investors will learn some data from the Polish economy: the dynamics of the retail sales and the manufacturing production and the PPI.

Technical analysis

Graph 1: WIG20 daily. Source: Stooq

At the beginning of the last week, the index of the largest Polish companies reported significant declines. Subsequently, the blue – chip index was growing systematically, whereas it did not manage to end previous week in the green color. As a result, the WIG20 stood at 1,734 pts. at the end of Friday’s session. The RSI oscillator did not indicate any signals. On the one hand, it seemed that the market was strong enough to defend the support level of 1,700 points, but on the other it was not able to break the resistance level of 1,800 points. Thus, the index was still below the line of the long – term downward trend. The potential resistance level stands at 1,750 pts.

Graph 2: Marvipol daily. Source: Stooq

This time it is worth paying attention to the shares of Marvipol. During the whole week, the share price increased by 13.1%. In the current year, the course has been in an upward trend. Nevertheless, it was not able to break the psychological level of PLN 7 for a long time. The situation changed in August when the share price started to move towards north dynamically. As a result, the course reached its highest level since 2013 (PLN 8.97). However, the RSI oscillator indicated overbought, so in the near future a correction can be expected.

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

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