Post by
retiredcf on Mar 19, 2023 1:14pm
Sector Weakness
This was from Monday when the SP closed at $56.63. GLTA
The sector is pricing in a lot of risks at current valuations, but we think sentiment will stay cautious for a period of time. With the SIVB crisis averted, investors may simply worry about the next shoe to fall. We think some sector exposure is still warranted unless one wants to market time things. Generally, 'crisis' times are buying opportunities. But rates, the economy, housing, and inflation are still risks here. We would be comfortable with sector exposure but think the TSX at 31% financials is too high. GSY really should not be impacted by recent events, at least in terms of funding or direct impact. Its loans are short term and it matches liabilities well. EQB is more closely tied to real estate/mortages but has so far managed things very well. Both stocks are very cheap and reflect a lot of risks in their valuations already. The SIVB situation has quickly changed rate expectations and this might be positive for the market overall. (5iResearch)