Stocks are giving back a little ground this Monday morning, as are gold, silver, and crude oil. Treasuries and the dollar are mostly flat.
On the news front…
The Kerch Strait Bridge that Russia uses to supply its troops in the Crimean Peninsula came under attack again. A previous bombing temporarily disrupted traffic on the crucial supply line, and the newest assault could do the same. Russia said it would stop allowing Ukraine to export grain by sea shortly afterward, and wheat futures jumped on the news.
China’s economy is dragging, with Q2 gross domestic product growth coming in at just 1% quarter over quarter. Unemployment is rising, and investors are concerned that rumored economic stimulus may not be as forceful as past efforts. Result: Several Wall Street firms are cutting their GDP growth forecasts for the full year.
US-traded, China-focused ETFs like the iShares China Large-Cap ETF (FXI) continue to underperform ETFs focused on US stocks, too. The FXI is down 2% year-to-date, while the SPDR S&P 500 ETF (SPY) is up around 18%.
American homeowners are increasingly turning to a strategy that got them in trouble years earlier...tapping into their home equity to fuel spending. Because refinancing first mortgages doesn’t make as much financial sense due to the surge in 30-year rates, many are using Home Equity Lines of Credit (HELOCs).
These revolving credit lines are typically arranged as second mortgages behind firsts. Lenders extended 1.41 million HELOCs last year, up 34% from 2021 and the highest since 2008.
