Volatility Rose in the European and Japanese Markets



FEZ fell by 0.18%

The SPDR Euro STOXX 50 ETF (FEZ) and the iShares MSCI EMU ETF (EZU) closed marginally lower on Monday, December 14, 2015. FEZ fell by 0.18% and closed at $34.18. EZU fell by 0.03% and closed at $34.87. However, the Wisdom Tree Europe Hedged Equity ETF (HEDJ) closed marginally higher. It rose by 0.02% on that day.

As all eyes are on the outcome of the FOMC’s (Federal Open Market Committee) meeting regarding the rate hike decision. The volatility increased in the market. Now, investors are waiting to take advantage of higher-yield bonds if the Fed announces a rate hike. If there’s a rate hike, investors may get a high coupon rate from the newly issued bonds. Since the rate hike will be a gradual process, according to Fed Chair Janet Yellen’s statement, investors might try to invest in short-term bonds. The iShares 1-3 Year Treasury Bond (SHY) fell by 0.10% and the iShares 20+ Year Treasury Bond ETF (TLT) fell by 1.3% on December 14, 2015, as the rate hike decision draws closer.

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Crude oil paused its downtrend

The United States Oil (USO) rose by 0.8% on December 14, 2015, as crude oil paused its downtrend and investors’ focus shifted towards the high-yield debt market. Energy stocks like ExxonMobil (XOM), Chevron (CVX), and Occidental Petroleum (OXY) rose by 2.3%, 3.3%, and 0.94%, respectively, on the same day.

EWJ rose by 0.92%

The iShares MSCI Japan ETF (EWJ) rose by 0.92% on December 14, 2015. There’s still mixed economic data for Japan. There’s hope for more stimulus from the BoJ (Bank of Japan) in the monetary policy review meeting on Friday, December 18, 2015. It would stimulate the economic recovery process.

Other global indexes

The SPDR S&P 500 ETF (SPY) closed higher by 0.5% on December 14, 2015, as crude oil prices paused the downtrend. The iShares MSCI Emerging Markets (EEM) closed on a positive note. It rose by 1.6% on the same day.

Next, we’ll discuss the performances of FEZ’s various industries as of December 14, 2015.


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