Summary

At the beginning of the new year the market sentiment was bullish. As a result, most of the global major stock indices ended last week in positive territory. In the US, the NASDAQ rose by 2.6%, the S&P500 increased by 1.7% and the DJI soared by 1%. In Europe, British FTSE250 went up by 1.5%, while French CAC40 and German DAX grew by 1%. The first week of 2017 brought a lot of macroeconomic data releases. Most of the readings from the Euroland exceeded market’s expectations e.g. the services PMI (53.7 pts.), the dynamic of the retail sales (2.3% y/y) and most of the confidence indices. Moreover, the publications of the PMIs from China did not fail as well. Nevertheless, investors focused on the latest data from the American economy. The readings of the PMIs and the ISM indices turned out to be higher than projections. On the other hand, the payrolls were quite disappointing. The unemployment rate rose from 4.6% to 4.7%, while the non - farm payrolls stood at 156K vs 170K expected. After all, these discrepancies did not have an adversely impact on the dollar’s quotations. However, during the whole week, the American currency depreciated against euro and Polish zloty. Moreover, investors learnt the minutes from the last meeting of the FOMC. The document confirmed the hawkish attitude of the council and sustained the market’s expectations – the monetary policy will probably be gradually tighten.

The last week was also fulfilling for investors at Ksiazeca. Despite the fact that the trade last only four days (because of the Epiphany the WSE was closed on Friday), stock market indices moved towards north. During the whole week, the WIG20 increased by 2.6%, the mWIG40 grew by 0.2% and the sWIG80 soared by 1.1%. The first days of the new year were particularly successful for banks and companies from the fuel sector – their share prices took off dynamically. Certainly, the publication of the manufacturing PMI affected the market sentiment positively. The index stood at 54.3 pts. – the market consensus was lower by 1.9 pts.. Furthermore, the chairman of the WSE’s board was changed. After a year of work Malgorzata Zaleska was dismissed. She was replaced by Rafal Antczak.

This week it is worth paying attention to the macroeconomic data from China: the PPI and the CPI, the balance of payments and the dynamic of the GDP growth for the fourth quarter of 2016. In addition, investors will learn the American data on the retail sales. In the Euroland, there will be releases of the unemployment rate, the Sentix index, the dynamic of the manufacturing production and the minutes from the last meeting of the ECB Governing Council. In Poland, the MPC will make a decision on the interest rates. The market does not expect any changes. What is more, Fitch and Moody’s will publish the review of the Polish credit ratings on Friday.

Technical analysis

Graph 1: WIG20 daily. Source: Stooq

The last week brought further growths of the WIG20. As a result, despite the slightly lower volume of trade, the index of the largest Polish companies tested the psychological level of 2,000 pts.. Nevertheless, efforts turned out to be inadequate, so the blue – chip index ended last week at 1,998 pts.. Special attention should be paid to the RSI oscillator and the stochastic oscillator. Both indicators were overbought. It is possible that the following days will bring a correction. It will end a current upward wave. The nearest support level stands at 1,957 pts.

Graph 2: PKO BP daily. Source: Stooq

This time we analyzed the technical situation of the PKO BP share price. During the whole week, it grew by 7.7%. The stock price started the first upward wave in the second half of 2016. Subsequently, it was in a sideways trend. Nonetheless, the beginning of 2017 brought its significant movements towards north which led to the breakthrough of the resistance level at PLN 28.4. Another barrier stands at PLN 31.5. However, it should be emphasized that the RSI oscillator was strongly overbought. Therefore, a correction cannot be ruled out.

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

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