Summary

There were plenty of indications that the negative effects of the bloody events in Turkey might have been noticeable on the world’s major stock markets. Meanwhile, the coup attempt and its aftermath did not affect the global market sentiment. During the whole week, British FTSE250 increased by 1.5%, German DAX went up by 0.8% and French CAC40 grew by 0.2%. In the US, the NASDAQ rose by 1.4%, the S&P500 soared by 0.6% and the DJI took off by 0.3%. The meeting of the ECB’s Governing Council was the highlight of the past week. However, it did not arouse any market emotions. The interest rates remained unchanged. During the conference Mario Draghi reiterated that Brexit was a significant source of the uncertainty. Thus, he emphasized the readiness to use all available monetary tools, provided that it would be necessary. Investors learnt the latest macroeconomic data as well. The readings of the European ZEW indices disappointed investors. They were much lower than the market expectations. There were also releases of the preliminary PMIs for the Eurozone. In July, the manufacturing PMI stood at 51.9 pts. and the services PMI amounted to 52.7 pts.. In June, both indices stood at 52.8 pts.. In the US, the data from the real estate market did not fail. In addition, the leading indicators index amounted to 0.3% vs 0.2% expected. On the other hand, the release of the Philadelphia Fed index was far from the market consensus (-2.9 pts. vs 5 pts. expected).

Last week there was bullish market sentiment on the WSE once again. During the whole week, the WIG20 rose by 1.9%, the mWIG40 soared by 3% and the sWIG80 went up by 1.2%. Certainly, the latest data from the Polish economy turned out to be a support for the major stock indices at Ksiazeca street. The average wages increased by 5.3% y/y vs 4.5% expected. The dynamics of the industrial production and the retail sales amounted to 6% y/y and 4.6% y/y. What is more, the earnings season on the WSE has began. Last week PKN Orlen published its financial statement for the second quarter of 2016. The results were significantly higher than those of last year, whereas they were slightly lower than the market expectations.

The highlight of the current week will be the FOMC meeting. The council will decide on the interest rates. The market does not expect any changes. Moreover, there will be publications of the American GDP growth for the second quarter of 2016, the Conference Board index and the Chicago PMI. Investors will learn the unemployment rates for the Eurozone and Poland as well. In addition, it is worth keeping track of the quarterly results’ presentations of the companies listed on the European, American and Polish stock markets.

Technical analysis

Graph 1: WIG20 daily. Source: Stooq.

It was the second consecutive week in which the index of the largest companies moved towards north. As a result, the WIG20 ended last week at 1,792 pts.. In the first part of the week, growths were accompanied by increased turnover. Nonetheless, while the index was approaching the psychological level of 1,800 points, the volume of trade was gradually going down. The RSI oscillator remained neutral. After the MACD oscillator had indicated a buy signal, it started to grow dynamically. In the current week, the WIG20 may test the level of 1,800 pts. once again. The breakthrough will probably be a harbinger of further growths.

Graph 2: Integer daily. Source: Stooq.

This time it is worth paying attention to Integer. During the whole week, its share price grew by nearly 23%. The course was in the long - term downward trend. Last week the share price managed to rebound from this year’s hole. The growths were accompanied by increased volume of trade as well. Nevertheless, the resistance level at PLN 40 turned out to be too strong barrier. After the RSI oscillator had indicated a buy signal, it started to go up. Perhaps, the market was still too weak to continue further growths. The potential support level stands at PLN 34.

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

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