Summary

The economic calendar was not rich and major global stock market indices did not see any significant changes last week. In the US, the DJI rose by 1%, the S&P500 increased by 0.7% and the NASDAQ soared by 0.1%. In Europe, German DAX went up by 0.4%, while British FTSE250 fell by 0.6% and French CAC40 decreased by 0.5%. This time the publication of the minutes from the last FOMC’s meeting deserved the event of the week name. The document confirmed the hawkish attitude of the council. Moreover, many representatives of Fed in their commentaries said that the increase in the interest rates should be possible soon. However, the market seemed to be quite sceptical about the announcements of the FOMC. It may be a result of the last year’s experience and still significant uncertainty associated with the shape of the stimulus package of Donald Trump. It is also worth paying attention to the preliminary readings of the American PMIs, which this time were much lower than projections. The index for the manufacturing sector amounted to 54.3 pts. and for the services one stood at 53.9 pts.. However, the PMIs for the Euroland exceeded market expectations. The manufacturing PMI stood at 55.5 pts. and the services PMI amounted to 55.6 pts. Furthermore, the CPI in the Eurozone accelerated significantly. The latest figure of 1.8% y/y was higher by 0.3 percentage point from the consensus. After all, despite the rising inflation and the robust signals from the European economy, it seemed that the ECB did not intend to make any hawkish decisions.

The last week proved to be quite successful for the investors at Ksiazeca. During the whole week, the WIG20 rose by 1.1%, the mWIG40 went up by 1.4% and the sWIG80 grew by 1.6%. Investors focused on the latest financial statements of listed companies. The financial performance of Eurocash failed – the company made much less profit in 2016 than in 2015. However, the financial results of LPP turned out to be in line with the market consensus. Investors learnt the unemployment rate for January as well. The indicator increased to 8.6%, whereas it should be emphasized that it was the lowest January’s reading for 26 years – it was a confirmation of the strong condition of the Polish labor market.

In the current week two people will be in the spotlight: Donald Trump and Janet Yellen. The American President will be speaking in Congress on Wednesday. Additionally, he will probably present assumptions of a long - awaited tax reform on Tuesday. Furthermore, the public appearance of Janet Yellen will take place on Friday. This may affect the market’s expectations on the monetary policy. What is more, investors will learn a lot of macroeconomic data from the Euroland and the US. Despite the first Friday of the month, the American payrolls will be published on the 10th of March.

Technical analysis

Graph 1: WIG20 daily. Source: Stooq

The first part of the past week brought a continuation of the WIG20 growths, while in the second one the index was dominated by bears. After all, during the whole week, the blue – chip index increased and its value at the end of the Friday’s trading session stood at 2,212 pts.. The declines, which were accompanied by the lower volume of trade, were signaled by the overbought RSI oscillator. In the case of the correction continuation, the market will probably move towards the next support levels at 2,200 pts. and 2,100 pts.. Nevertheless, there were plenty of indications that the market sentiment may remain bullish in a broader term.

Graph 2: Braster daily. Source: Stooq

This time it is worth paying attention to Braster. During the whole week, its share price increased by 30.2%. After a period of consolidation, the stock price moved in a downward trend. Undoubtedly, this was a result of weak sales performance in the first months of full operation of the company. Nonetheless, the latest valuation of the company at PLN 36.8 per share turned out to be a very strong incentive to stock price growths. However, the resistance level at PLN 24 stopped the market’s euphoria. It is possible that in the near future the market will continue to pursue profits, especially that further prospects have been subjected to the significant uncertainty.

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

This material is intended to be for informational purposes only and does not constitute any investment, legal or tax advice or any other type of advice nor constitute an offer according to the Civil Code or a public offer within the meaning of the Act on Public Offering. MM Prime TFI SA has done due diligence to ensure that the information contained in this presentation is accurate and based on reliable sources. MM Prime TFI SA is not responsible for the accuracy and completeness of the information, nor for any damage that may arise from the use of it. Nothing in this document should be construed as an investment advice. The use of this material as the basis or evidence to make an investment decision takes place at the sole risk of the person who takes such a decision. This material is available free of charge.