US margin debt, a measure showing how much investors are borrowing to buy stocks on the New York Stock Exchange, is starting to run too hot — a potentially concerning sign for the credit market, according to credit strategists at Deutsche Bank AG.
The strategists, led by Steve Caprio, said that margin debt is — by some metrics — higher than during the US tech bubble and near all-time highs. The strategists have been tracking margin debt as an indicator of sentiment for years, but wrote about it for the first time on Thursday because it is “getting closer to that point where market euphoria is becoming too hot to handle.”