7 Stocks to Buy Ahead of the June 23 Bank Stress Test Results
2022 has been a rough ride for bank stocks. Recession fears continue to drag financial shares down, leading to significant buying opportunities. For instance, the Dow Jones U.S. Financial Services index has fallen more than 23% year-to-date (YTD). Similarly, the Financial Select Sector SPDR Fund (NYSEARCA: XLF ) has declined around 23% in 2022. Meanwhile, the Federal Reserve (Fed) announced that on Jun. 23, it would release the results of its annual stress test of the largest domestic banks. Analysts note that the current scenario includes a global recession combined with increased stress in commercial real estate, as well as corporate debt markets. According to the Bank for International Settlements, Common Equity Tier 1, or CET1 , “is the highest quality of regulatory capital, as it absorbs losses immediately when they occur.” For large banks, the Fed has set the CET1 capital requirement at 4.5% . As in previous years, investors will focus on the stress capital buffer these financial institutions will need to hold as a protective cushion in case of an economic collapse.
7 Stocks to Buy Ahead of the June 23 Bank Stress Test Results
2022 has been a rough ride for bank stocks. Recession fears continue to drag financial shares down, leading to significant buying opportunities. For instance, the Dow Jones U.S. Financial Services index has fallen more than 23% year-to-date (YTD). Similarly, the Financial Select Sector SPDR Fund (NYSEARCA: XLF ) has declined around 23% in 2022. Meanwhile, the Federal Reserve (Fed) announced that on Jun. 23, it would release the results of its annual stress test of the largest domestic banks. Analysts note that the current scenario includes a global recession combined with increased stress in commercial real estate, as well as corporate debt markets. According to the Bank for International Settlements, Common Equity Tier 1, or CET1 , “is the highest quality of regulatory capital, as it absorbs losses immediately when they occur.” For large banks, the Fed has set the CET1 capital requirement at 4.5% . As in previous years, investors will focus on the stress capital buffer these financial institutions will need to hold as a protective cushion in case of an economic collapse.