Market View

Failure of Silicon Valley Bank and consequent near failures shocked confidence in the banking system and threatened to trigger a broader financial crisis. US inflation rose 0.4% in February and 6% year-over-year, marking the 8^th straight month of slowing and the lowest YoY reading since September 2021. Markets are now pricing three-quarters chance of a 0.25% hike at the Fed meeting next week, and a quarter probability of no hike at all. Just a week earlier, markets were pricing a 70% chance of 0.50% hike and a 30% probability of a 0.25% hike. European Central Bank (ECB) delivered a 0.50% rate hike this week. The Canadian dollar was 72.71 cents USD. The U.S. S&P500 ended the week up 2.1%, while the TSX was down 1.2%.

Only a few sectors saw rather larger swings. Energy gave up 11.4%, while financials slid 3.0%. Healthcare edged down 1.5%. Technology added 4.2%, while utilities gained 4.1%. The most heavily traded shares by volume were Wallbridge Mining Company, Cenovus Energy, and Capstone Copper Corp.

5 from 5i

Here are five reads we found interesting last week:

• How the weekend-long freakout over Silicon Valley Bank ended, by Nitish Pahwa of Slate
• The fed’s inflation goal is completely arbitrary, authored by Santul Nerkar of FiveThirtyEight
• Profit margins are becoming a key controversial issue in the inflation discourse, posted on TKer by Sam Ro
• Screaming ‘Bank run!’ in a crowded Twitter, written by Douglas Boneparth of this is the top
• Ouch! A massive bond reversal hits trend, published by RCM Alternatives

Happy Reading & Stay Safe!

Disclosure: The analyst(s) responsible for this report do not have a financial or other interest in securities mentioned.