Summary

Last week the Fed’s meeting was in the spotlight. The consensus forecast a low probability of interest rate raise, whereas did not rule out a council’s hawkish statement. The FOMC actually did not change the interest rate. However, the members of the committee revised their projections on inflations expectations. As a result, the Fed announced just two interest rate hikes by the end of the year. On the one hand, this information caused the US dollar’s depreciation but on the other, it also supported American stock market indices. In addition, investors learnt the dynamics of the US industrial production and the retail sales. The former stood at -1% and the latter amounted to 3.1%. It is also worth paying attention to the price of crude oil which was in a short – term upward trend. Thus, the price of black gold ended the week above 40 dollars per barrel. During the whole week, the DJI rose by 2.3%, the S&P500 grew by 1.4% and the NASDAQ took off by 1.1%. In Europe, there was a low volatility in the stock markets during the first part of the week. Nonetheless, the situation changed on Wednesday. The topic of the day was agreement on the merger of two major European stock exchanges - London Stock Exchange and Deutsche Börse. Moreover, there was a publication of European industrial production, which grew by 2.8% y/y vs 1.75% expected. Investors also learnt the CPI. It stood at -0.2% y/y. During the whole week, British FTSE250 increased by 1.8% and German DAX rose by 1.2%. Unlike to them, French CAC40 declined by 0.7%.

Polish indices ended the week in the green as well – the WIG20 took off by 2.7%, the mWIG40 went up by 0.8% and the sWIG80 soared by 2.6%. In Poland, there were a lot of economic data’s releases. The dynamic of the industrial production stood at 6.7% y/y and the retail sales growth rate amounted to 3.9% y/y. In addition, it turned out that there was a trade surplus again. It should be also reiterated that the price growth stood at -0.8% y/y. Despite the deflation the dynamic of the M3 money supply growth stood at 10%. What is more, investors also learnt financial results of many companies. Nevertheless, a special attention was paid to the information on the future financial involvement of energy companies in the mining sector. The agreement which covered the potential acquisition of a majority stake in Kopex by Famur was in the investors’ limelight as well.

In the current week, investors will learn European Consumer Confidence Index and the PMIs. In Poland, it is worth paying attention to the publication of the unemployment rate. In the US, there will be a release of the GDP growth in the fourth quarter of 2015. Furthermore, it is worth remembering that many global stock markets are closed on Good Friday e.g. in the US, Germany, Great Britain, France and Poland.

Technical analysis

Graph 1: WIG20 daily. Source: Stooq.

In the first part of the week the WIG20 tested the psychological level of 1,900 pts.. Subsequently, the market sentiment improved sharply. As a result, the index of the largest companies ended the week at 1,961 pts.. Moreover, the WIG20 continued the third upward wave. It is worth noting that growths were confirmed by high volumes. It meant that the bulls dominated the market. The RSI oscillator indicated the overbought. Upcoming sessions may bring movements towards the next resistance which stands at psychological level of 2,000 pts.. Then, the correction can be expected.

Graph 2: Monnari daily. Source: Stooq.

One of the most interesting shares in the past week were those of Monnari – the price grew by 11%. The course tried to break out of the horizontal channel for the second time. This time the breakthrough seemed to be clear, so the close future may bring further movements towards north. The nearest resistance stands at PLN 16.15. The RSI oscillator pointed out the overbought, whereas the MACD oscillator indicated a buy signal. In the short – term a slight correction can be expected. Nevertheless, in the medium – term there is a probability of further growths.

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

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