LyondellBasell Industries (NYSE: LYB), one of XLB’s top 10 holdings, said in the fourth quarter low oil prices will damp its margins. That after the company helped materials ETFs perform well in the first half of 2014 on the back of rising crude prices. [A Lyondell Lift for This Materials ETF]
A recent Morgan Stanley report highlighted PPG Industries (NYSE: PPG), a top 10 holding in XLB, as one materials name that could endure lower oil prices, but the bank also identified Eastman Chemical (NYSE: EMN), LyondellBasell and Dow Chemical as potentially challenged by lower oil prices. Those stocks combine for over 16% of XLB’s weight.
XLB’s five-year correlation to the United States Oil Fund (NYSEArca: USO) is over 59%, according to State Street data.
Materials Select Sector SPDR
