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FEZ and EWJ Closed Lower as Crude Oil Prices Fell 6%

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FEZ fell by 0.28%

The SPDR Euro Stoxx 50 ETF (FEZ) and the iShares MSCI Eurozone (EZU) closed on negative notes on Monday, December 7, 2015. Both of the ETFs fell by 0.28% on the same day. They closed at $35.70 and $36.34. On December 7, 2015, crude oil prices fell 6%. This created a panic sentiment for the overall equity as well as the commodity market.

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Crude oil prices fell to a seven-year low

Crude oil prices are falling continuously because of the oversupplied market. In contrast, the outcome from OPEC’s (Organization of the Petroleum Exporting Countries) meeting disappointed investors. OPEC said that it will keep pumping as much as crude oil it does now—about 31.5 MMbpd (million barrels per day). There won’t be a cutback in the production. This statement implies that there won’t be a ceiling for production. It impacts investor sentiment. The United States Oil ETF (USO) fell 5.9% on December 7, 2015.

Integrated oil and gas stocks like Total (TOT), BP (BP), Repsol, and Eni (EAA) fell by 1.4%, 3.4%, 5.5%, and 2.4%, respectively. The SPDR Select Sector Fund (XLE) fell by 3.80% on December 7, 2015.

EWJ fell by 0.24%

On Monday, December 7, the iShares MSCI Japan ETF (EWJ) closed at $12.39. It fell by 0.24% following a global sell-off in the commodity and equity space.

Other global indexes

The VanEck Vectors Russia ETF (RSX) fell by 3.4% as crude oil prices hit a seven-year low. The Russian economy vastly correlates to oil prices. Crude oil accounted for 68% of the country’s total exports in 2013, according to the EIA (U.S. Energy Information Administration). The iShares MSCI Emerging Markets (EEM) and the SPDR S&P 500 ETF (SPY) fell by 1.7% and 0.61%, respectively, on December 7, 2015.

In the next part of this series, we’ll discuss the performances of FEZ’s different industries as of December 7, 2015.

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