Monday was really slow on the equities markets so really this past week started off with the Federal Open Market Committee minutes published on Tuesday. According to the report, the Us economy is expected to slow down this quarter to around 1.5 – 1.8% despite prior forecasts of 2.5%. The FOMC also mentioned that the risk on inflation is still high. Despite that the market reacted otherwise as expecting another interest rate cut. The bad news caused risk aversion to increase. American indices lost during the course of the week. The Dow Jones Industrial Average dropped 2.36% to 12,788 till Wednesday while the S&P 500 declined 2.19% to 1,415.9. Both indices opened in green on Friday. Following American indices, the Japanese Nikkei 225 lost 2.39% to 14,883. Thursday was a day off for American traders due to the Thanksgiving Holiday while Friday the trading session will be shortened by 3 hours.

Surprisingly, the Warsaw Stock Exchange performed pretty well. Its effect had macroeconomic report, which showed that the Polish economy is improving. Lower than expected PPI inflation certainly had its positive effect on the equities market. Industrial Production increased by 10.6% against the forecasted 9.4% (Prior reading: 5.2%). The good news made investors to go stock shopping. The WIG 20 gained 1.02% to 3,567 and seems to be heading towards the 3,600 level. At the end of Friday’s session the WIG 20 lost ground since the government’s publication showed that net inflation increased to 1.4% from 1.2%. This is another signal for the Polish Monetary Policy Council to raise interest rates. Such decision will be a blessing for the Złoty but could do some damage to the stock market. Still, the direction, in which the market will move will depend much on the performance of US indices.

Adam Narczewski