The US Core Durable Goods publication showed a decline by 0.7% against the forecasted 0.5% increase. Risk aversion increased as the fear of recession in the US came back. A sellout of equities in the US began, which was followed by investors worldwide. The Dow Jones Industrial Average dropped below the 13,500 level to 13,360. On Friday though, the Dow opened in green. The S&P 500, which tested the 1,500 level, declined to 1,475. Following the DJIA, the S&P 500 also opened in green on Friday. Asian markets usually react strongly to the performance of US indices. This time was the same with the Japanese Nikkei 225 declining from 15,625 to 15,240. European stocks performed a little better with the German DAX and the Russian RTS declining 0.2% and 0.6% respectively. The French CAC 40 did a little bit worse declining 0.9% to 5,600.

Inflationary pressures in Poland, which increase the chance of an interest rate hike, are not helping the Warsaw Stock Exchange (WSE). The WIG 20, the major WSE’s index, lost 2.7% over the course of the week experiencing the biggest decline in the last hour of trading on Friday. The index finished the week at 3,460 and is closing to an important support level at 3,440. December was not a good month for Polish investors. Historically, being a good month for equities, it did not deliver profits this time. The WIG 20 finishes lower than most analysts expected.

Adam Narczewski