US futures point to a slight dip upon opening today as COVID-19 cases increase along with further shutdowns across the United States. The markets have been setting records lately and I think red days are healthy for the market, especially with the status of our underlying economy. Like so many intelligent long-term investors say, “match your asset allocation with your risk profile” to ensure you are reaching your investment goals depending on your age, risk tolerance, and target retirement date.
Market Correction 2021?
Am I the only one who sees the market as being overvalued right now? Many quality stocks are at their 52-week high, I know “real” economic return happens in the long-run and we see the growth via the output of economics production through goods and services. I think we are due for a market correction anytime now. Again, make sure you have your asset allocation set to match your risk profile!
Federal Reserve – Bank Stress Tests
The Federal Reserve Board announced on Friday that results from its second round of bank stress tests will be released on Friday, December 18, at 4:30 p.m. EST.
Stress tests help ensure that banks have adequate capital to absorb losses so that they can lend to households and businesses even in a severe recession. For this second round of stress tests, large banks will be tested against two scenarios, each featuring a severe recession to assess their resiliency.
Earlier this year, the Board’s first round of stress tests found that large banks were well capitalized. Nonetheless, in light of the economic uncertainty, the Board is conducting this second round to further test the resiliency of banks.
Banks with more than $100 billion in total consolidated assets are subject to the Board’s stress tests.federalreserve.gov
There is a lot going on right now between vaccine developments, shutdowns, rising COVID-19 cases, uncertainty on who will become the next POTUS and what that will mean for GDP and the overall economy. Will tariffs be reversed, will Biden pose deregulations and globalism? All of these questions will be answered in my next market update!