Stocks regained some ground on Monday morning, as did gold, silver and crude oil. Treasuries and the dollar are mostly stable.
On the news side…
The Kerch Strait Bridge that Russia uses to supply its troops in the Crimean Peninsula was attacked again. A previous bombardment temporarily disrupted traffic on the crucial supply line, and the new assault may do the same. Russia said it would stop allowing Ukraine to export grain by sea soon after, and wheat futures jumped on the news.
China’s economy is lagging, with second-quarter gross domestic product growth just 1% quarter-on-quarter. Unemployment is rising and investors fear that the rumors of economic stimulus will not be as powerful as past efforts. Result: several Wall Street companies are reducing their GDP growth forecasts for the whole year.
U.S.-traded, China-focused ETFs like the iShares China Large Cap ETF (FXI) also continue to underperform ETFs focused on US equities. The FXI is down 2% since the start of the year, while the SPDR S&P 500 ETF (TO SPY) is up about 18%.
American owners are increasingly turning to a strategy that got them into trouble years ago…tap into the equity in their home to fuel their expenses. Since refinancing first mortgages doesn’t make as much financial sense due to soaring 30-year rates, many are using home equity lines of credit (HELOCs).
These revolving lines of credit are generally arranged as second mortgages behind the first. Lenders extended 1.41 million HELOCs last year, up 34% from 2021 and the highest since 2008.
