Although the media has been raising concerns about the US consumer's financial health, this article provides several reasons for
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2023-08-29 | Sign Up | View Online | Advertise
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Markets & Economy
US consumers aren't even close to being tapped out - here’s why (3 min read)

Although the media has been raising concerns about the US consumer's financial health, this article provides several reasons for optimism. Debt is still manageable, with only a small portion of income going toward payments. Consumer assets far outweigh liabilities, and untapped home equity provides additional financial strength. Most homeowners locked in low mortgage rates despite the hikes and retail spending remains robust fueled by growing cash reserves. With these factors in play, it will likely continue to drive the economy and markets forward this year.
Why Are US Mortgage Rates So High? (3 min read)

Despite US inflation falling to a reasonable 3.2% and the 10-year treasury rate only at 4.25% which isn’t historically high, the 30-year fixed mortgage rate still reached 7.5% last week. This might seem odd, but mortgage rates usually depend on the spread to Treasury yields. Right now spreads are wider due to fewer mortgage refinances and home supply shortages. The Fed's involvement in mortgage bonds and the fast rate increase also impact this. Eventually, as the economy cools, mortgage rates might fall, which should boost home demand.
Business & Stocks
Zillow to offer a 1% down payment loan program (3 min read)

Zillow, an American tech real-estate marketplace company, is introducing a 1% down payment option through its home loans program. Eligible buyers pay 1% down, while Zillow covers an additional 2%, totaling a 3% down payment. The 2% is covered through closing costs and is not a payment to the borrower. This program aims to assist buyers facing affordability challenges and is initially available only in Arizona but with plans for expansion. The move also allows Zillow to go beyond listings and closer to its goal of becoming an all-in-one “housing super app”.
Evergrande Shares Plunge 87% in Hong Kong After Trading Resumes (3 min read)

China’s Evergrande Group became a penny stock after its shares plummeted about 87% in Hong Kong trading after a 17-month suspension. The company has been losing money, with a $33 billion yuan loss so far this year on top of the 582 billion yuan previous losses over the past two years. Evergrande went from being one of the largest property developers in China to a struggling highly indebted company. This downfall has highlighted China's housing crisis as developers face challenges due to government regulations and economic shifts.
Funds & ETFs
BlackRock’s Fink: ‘Crypto Is Digitizing Gold’ (3 min read)

Larry Fink, founder and CEO of BlackRock, has expressed his support for cryptocurrencies as a digital alternative to traditional hedging assets like gold. BlackRock recently filed with the SEC to launch a spot Bitcoin ETF which surprised many given Fink’s mild distaste for digital assets in the past. He now believes that cryptocurrencies are digitizing gold by providing a hedge against inflation and currency devaluation. Fink envisions the tokenization of assets, including Bitcoin, as a way to revolutionize finance and democratize investing by lowering costs.
Best Commodity ETFs for Inflation (5 min read)

There are about 96 commodity ETFs in the US markets offering different strategies, including direct holdings or derivatives. Despite the potential of being a hedge against inflation, the effectiveness of this hedge can vary depending on several factors. Over the past few years, broad market commodity ETFs tend to have a stronger relative performance during inflationary periods when compared to single commodity ETFs. This article highlighted the top ETFs in that category which annualized over 20% in the last 3 years while Gold ETFs had negative returns.
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