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Chinese Market Sell-Off Weighed Heavily on FEZ

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The entire industry closed on a negative note

On Monday, January 4, 2016, the entire industry of the SPDR Euro STOXX 50 ETF (FEZ) and the iShares MSCI Eurozone ETF (EZU) closed on a negative note. The Chinese market sell-off weighed heavily on FEZ’s performance. Weaker manufacturing PMI data created doubts about China’s economy and sent negative signals around the world.

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Auto manufacturing industry

The automobile manufacturing industry provided the highest negative return of 5.1% on Monday, January 4, 2016. Auto manufacturing stocks such as Volkswagen (VLKAY), Daimler (DDAIF), and BMW fell 6.6%, 4.2%, and 4.4%, respectively, that day. The drastic fall in automobile manufacturing stocks came after the United States Department of Justice filed a civil lawsuit against Volkswagen for violating environmental laws by installing illegal devices to damage emission control systems in nearly 600,000 vehicles.

Miscellaneous manufacturer and apparel industry

The miscellaneous manufacturer industry fell 4.3% on Monday, January 4, 2016. Siemens (SIEGY) fell 4.3% that day. The apparel industry fell 3.9% that same day as LVMH Moët Hennessy Louis Vuitton (LVMUY) fell 3.9%.

Oil and gas industry

The oil and gas industry provided the lowest negative return of 1.6% on Monday, January 4, 2016. The tension between Iran and Saudi Arabia and the end of diplomatic ties between the two countries may raise concerns over possible oil supply disruptions. After this news, oil prices went up in early trade but closed marginally lower due to global sell-off pressure. Oil and gas stocks such as Total (TOT), Repsol, and Eni SpA (EAA) fell 1.7%, 0.59%, and 2.6%, respectively, on January 4.

In the next part of this series, we’ll look at the performance of FEZ’s top losers on January 4, 2016.

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