Summary

The period between Christmas and New Year’s Day brought lower volatility and lower volume of trade in the financial markets. Nevertheless, the market sentiment was bearish in the US – during the whole week, the NASDAQ fell by 1.5%, the S&P500 went down by 1.1% and the DJI declined by 0.9%. Perhaps, the latest news on attacks of Russian hackers during the race for the White House had an adversely impact on the market tone. As a result, the Obama’s administration imposed sanctions on 35 Russian diplomats. After all, Russia refrained from retaliation, while Donald Trump emphasized that it was the time to take care of more important matters. Famous billionaire will soon start its term of office, so the return of the uncertainty may adversely affect attitude of the US stock indices. Investors learnt the latest macroeconomic data from the US as well. The readings of the Conference Board index (113.7 pts.) and the Richmond Fed index (8 pts.) were much higher than market expectations. On the other hand, the publication of the Chicago PMI index failed – it stood at 54.6 pts. vs 57 pts. expected. Unlike to the US, the market sentiment was bullish in Europe – during the whole week, British FTSE250 increased by 0.9%, French CAC40 rose by 0.5% and German DAX went up by 0.3%. Good news from Italy undoubtedly improved market tone – the Italian government found a way to subsidize a failing bank Banca Monte dei Paschi di Siena.

A merry atmosphere also accompanied investors in Poland. During the whole week, the WIG20 rose by 0.7%, the mWIG40 increased by 1.2% and the sWIG80 soared by 1.1%. A national economic calendar was not very rich. Investors learnt the CPI. The reading exceeded projections significantly - the index stood at 0.8% y/y vs 0.5% expected. It was the first month since July 2014 when the annual price growth was positive. Moreover, a parliamentary crisis was not ended. There were not any indications that the dispute would be resolved. However, it did not affect market sentiment. It should be also noted that TXM launched its IPO last week. It was the nineteenth company which started its listing on the main market in 2016.

The first week of the new year will bring a lot of macroeconomic data readings. First of all, it is worth paying attention to the readings of the PMIs, the confidence indices, the PPI and the dynamic of the retail sales for the Euroland. In addition, investors will learn the PMIs and the ISM indices for the US. The highlight of the week will be the release of data from the American labor market.

Technical analysis

Graph 1: WIG20 daily. Source: Stooq

As expected, the last week of 2016 did not bring any significant movements of the WIG20. However, despite the very low volume of trade, the index of the largest Polish companies managed to continue growths and ended the past week at 1,947 pts.. The RSI oscillator was at a high level, whereas it remained neutral. The nearest resistance stands at the psychological level of 2,000 pts.. A breakthrough of this barrier will be a signal for further growths. Moreover, it will be a confirmation of the upward trend. On the other hand, a potential support level stands at 1,900 pts.

Graph 2: Trakcja daily. Source: Stooq

This time Trakcja deserved the company of the week name. During the whole week, its share price increased by 6.6%. Certainly, Trakcja’s shareholders have had a lot of reasons to be glad – the stock price has been steadily rising since June 2016. Recent growths, which were accompanied by the increased volume of trade, led to the breakthrough of the resistance level of PLN 13.7. Moreover, the MACD oscillator indicated a buy signal, while the RSI oscillator remained neutral. There were plenty of indications that the share price started another upward wave.

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

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