Summary

Last week global stock exchanges were dominated by bears. In the US, the NASDAQ went down by 2.7%, while the S&P500 and the DJI decreased by 1.3%. In Europe, German DAX declined by 3.2%, French CAC40 fell by 3.1% and British FTSE250 deteriorated by 0.4%. Investors focused on data from the US. The publications of the Conference Board Index, the Chicago PMI and the University of Michigan Consumer Confidence Index disappointed investors. Moreover, the dynamic of the durable goods orders was lower than the market expectations. To add insult to injury, the reading of the annualized GDP growth rate for the first quarter of 2016 stood at 0.5% q/q vs 0.7% expected. It is worth noting that the FOMC held a meeting last week. The council did not surprise – the interest rates remain unchanged. Nevertheless, the Fed statement was less dovish than the minutes from the March meeting. On the other hand, it was still hard to believe in the interest rates hike in June. In the Eurozone, a release of the unemployment rate did not fail. It amounted to 10.2% in March vs 10.3% in February. In addition, the readings of the confidence indices caught investors a little bit by positive surprise. Nonetheless, it should be also noted that during the whole week, the oil price increased by 5%. It is worth paying attention to the decision made by Bank Of Japan. Representatives of the BOJ did not change the scope of the QE. What is more, the interest rates remained unchanged. As a result, during the whole week, the NIKKEI225 went down by 4%

In Poland, the market sentiment was bearish as well – the WIG20 fell by 2.4% and the mWIG40 declined by 1.4%. Unlike to them, the sWIG80 grew by 0.1%. Investors learnt the unemployment rate. It stood at 10% in March vs 10.3% in February. The earnings season of companies listed on the WSE gained momentum. The financial results for the first quarter of 2016 presented by Dom Development, Budimex, mBank and Lotos did not fail. Meanwhile, JSW published its financial statement for the year 2015. The company made a loss in amount of PLN 3.3 billion. Nevertheless, during the whole week, the share price increased by 12.7%. In addition, Polski Bank Komórek Macierzystych and Master Pharm launched their IPO last week.

In the current week, investors will learn a lot of crucial economic data from the Eurozone: the PMI, the PPI and the dynamic of the retail sales. Moreover, there will be a conference with the participation of Mario Draghi. In the US, there will be a publication of data from the labor market. It is worth paying attention to Chinese PMI. The Middle Kingdom will present the balance of payments as well. In Poland, investors will learn the industrial PMI. Furthermore, the MPC will make a decision on interest rates.

Technical analysis

Graph 1: WIG20 daily. Source: Stooq

Lately, the WIG20 broke the support at 1,900 pts.. However, the second part of the week brought an improvement of the market sentiment. Thus, the index of the largest companies ended the last of week of April at 1,896 pts.. The RSI oscillator went down dynamically and remained neutral. The level of volumes was low again. What is more, moving averages formed a death cross formation. Upcoming days may bring further declines. Nonetheless, due to the May holidays they will not probably be dynamic. Next support stands at 1,860 pts..

Graph 2: Kruszwica daily. Source: Stooq.

Kruszwica deserved the company of the week name. During the whole week, its share price grew by 8.6%. The course has been in a sideways trend for couple of years. The share price approached the resistance at PLN 64. The RSI oscillator pointed out an overbought, while the MACD oscillator indicated a buy signal. It is worth reiterating that if the next session bring a black candle, a Bearish Dragonfly Doji Pattern will be created. Therefore, there is a high probability that the share price will not break the resistance. It means that the continuation of the horizontal trend can be expected.

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

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