Highlights: US stocks gained for the second day as the market became optimistic about the financial sector following Janet Yellen’s reassurances to safeguard against further banking crises. Regional bank stocks continued to rise but were led by First Republic this time, which jumped nearly 30% after losing 47% the day prior.

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Canada Feb inflation rate slowest in 13 months, backing up rate pause (3 min read)
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Canada's inflation rate slowed to 5.2% in February, its lowest level in 13 months, down from 5.9% in January, beating analysts' expectations. The core inflation, excluding food and energy, rose by 4.8% year-over-year, which was still lower than the 4.9% increase in the previous month. The Bank of Canada left its key rate on hold earlier this month and will pause further rate increases if inflation comes down in line with its forecasts, reaching its 2% target next year. Due to banking turmoil, money markets expect the bank's next move to be a cut later this year.

Goldman Sachs No Longer Sees $100 Oil In 2023 (4 min read)
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Oil prices suffered their worst week in 2023 amid concerns over the global economy following the banking crisis in Europe and the US. Despite forecasters predicting stronger demand than supply growth, the focus is shifting toward fears of an economic slowdown that would push prices lower. Goldman Sachs has already revised its oil price forecast, expecting it to rise only to $94 per barrel in the coming year compared to its earlier forecast of $100. However, China and India's growth are still expected to drive oil demand higher.

Treasury Secretary Yellen says the government could backstop more deposits if necessary to stop contagion (4 min read)
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Treasury Secretary Janet Yellen said the US government is prepared to offer further deposit guarantees if the banking crisis worsens. The statement is the latest attempt to calm customers worried that liquidity problems caused by duration risk with banks’ holdings could lead to similar institutions being unable to meet deposit requirements. Yellen added that regulators will be looking at whether stronger regulations will be needed to prevent a similar situation in the future. Bank stocks, particularly at regional institutions, rose after the news.

11 Things The SVB Collapse Tells Us About Investor Behaviour (4 min read)

The collapse of SVB highlights some of the damaging behaviors of investors during unexpected events. These behaviors include the contraction of our time horizons, narrow focus, feeling the need to act, and becoming after-the-fact experts. Additionally, people tend to overstate or ignore risks, and focus on salient risks that are available in recent memory. It is important to remember that unexpected events can happen, and investors should focus on taking a long-term perspective, systematic rebalancing, and diversification to deal with these situations.

KRE Worth Another Look After Bank Bailouts (4 min read)
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The implosion of recent US banks has resulted in investors turning to the SPDR S&P Regional Banking ETF (KRE) to navigate the turmoil. KRE experienced a significant price drop when SVB failed but has since risen with a steady stream of investments coming in. The recent failures highlight the importance of regulators in managing the risks of financial institutions of all sizes, with management also responsible for the losses. Regulators will likely scramble to ensure compliance, which could be bullish for KRE and other bank ETF products in the near term.

How Does a Gold ETF Work? (5 min read)
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A gold ETF is an investment fund that holds gold assets, such as bullion or futures contracts, and its price is linked directly to the price of gold. The current largest gold ETF is the SPDR Gold Trust (GLD). Compared to physical gold, gold ETFs have lower transaction costs and are more liquid, but it also comes with counterparty risks and no tangible assets. How gold ETFs are taxed will depend on their legal structure and type of account. More on the benefits, risks, and taxation on gold ETFs are available in the article.

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