December, historically, was a good month for stock markets. The end of November might be proving that theory. During the last week indices worldwide ended in green. The Dow Jones Industrial Average advanced 2.83% to 13,313 and the S&P 500 gained 2.08% to 1,469.4 till Thursday. The good results of US markets positively affected Asian stock exchanges. The Japanese Nikkei 225 added 4.42% to 15,628.

The increases of indices can be attributed mainly to declining risk aversion of investors. Optimism was back on the markets. What fueled confidence of investors were news flowing form the United States. Tuesday was the only day when markets decline due to a worse than expected reading of the Consumer Confidence report (actual: 87.3, forecast: 91.5) prepared by the Conference Board. Declining optimism pushed indices down. The next couple of days brought better news. Existing Home Sales and New Home Sales showed a declining trend of home sales but the readings were still better than expected. Also well received was the US GDP report, showing that the American economy grew by 4.9% in the third quarter. Its effect on the equities market had Ben Bernanke, who gave a speech in the Charlotte Chamber of Commerce. Currently, there is higher risk that the American economy will slow down rather than growing inflation. The outlook for the future is uncertain due to the “renewed turbulence” on financial markets, said the Fed’s Chairman yesterday during his speech in Charlotte, North Carolina. That confirmed speculation that the US central bank might decrease interest rates one more time as soon as next month. Such expectations pushed indices in the north direction.

The Polish market was not affected by the US indices as usual. The WIG 20 finished the week exactly where it started at 3,580. It rebounded from 3,440 it reached on Tuesday. The advance is no surprise since American indices performed well in the second part of the week. The gain was not as big because the Polish Monetary Policy Council (MPC) raised interest rates in Poland. Such decision was widely expected by the market. Now, the WIG 20 remains close to an important resistance level at 3,590. Breaking that level might push the major Polish index to 3,660 next week.

Adam Narczewski