Rattled Oil Prices Take SPY and EWU Down
(Continued from Prior Part)
Disappointing global growth
The iShares MSCI United Kingdom Index (EWU) fell 0.7% on Wednesday, December 30, 2015, due to the rout in oil prices. Besides, the IMF’s (International Monetary Fund) head, Christine Lagarde, warned about the disappointing global growth in 2016. The gradual interest rate hikes in the United States, coupled with the slowdown in China and the Eurozone, led to the global economic slowdown. Lagarde also warned about the rising financial risks in emerging markets. The following graph compares the stock price movements of Antofagasta (ANTO) and Fresnillo (FRES) since October 2015.
Top stocks
The stocks at the top of the iShares MSCI United Kingdom (EWU) on December 30 were Antofagasta (ANTO-LON), Next (NXT-LON), and Rexam (REX-LON). These stocks rose 2.5%, 0.6%, and 0.5%, respectively, on the day.
Fresnillo (FRES-LON) yielded -0.1% on Wednesday, December 30, 2015. The trailing-five-day returns of ANTO and FRES are 11.0% and 5.7%, respectively. ANTO traded at 472.1 British pounds, and that was below its moving averages. Its 100-day, 50-day, and 20-day moving averages are 530, 493, and 455 British pounds, respectively. The stock earned five “Buy,” 13 “Hold,” and seven “Sell” recommendations. The mining stocks Rio Tinto (RIO) and BHP Billiton (BHP) fell 1.0% and 2.0%, respectively, on December 30.
Meanwhile, the stocks of oil and gas producing companies fell. For example, Royal Dutch Shell (RDS.A) (RDS.B) and BP (BP) fell 1.0%, 1.0%, and 1.6%, respectively, on the day. The holiday season saw the stocks of Carnival (CCL) (CUK) rise 0.4%.
Bottom stocks
The stocks at the bottom of the EWU ETF on December 30 were Tullow Oil (TLW-LON), Glencore (GLEN), and Standard Chartered (STAN-LON). These stocks yielded -5.5%, -3.5%, and -2.5%, respectively, on the day.
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