Stock market margin debt rose to its highest level in 10 months as leveraged trading continues to make a significant comeback in 2023. The June 2023 margin debt figure from FINRA came in at $681.23 billion, up approx. 12.5% since the end of 2022 ($606.66 billion).
Margin debt is likely increasing because market participants feel good about the outlook for lower rates in the future. Market participants have also enjoyed declining inflation this year which has allowed them to put more money into the market.
Margin Debt and Stock Market Relationship
The stock market and margin debt certainly have a decent correlation, rising margin debt is usually associated with a rising stock market and vice versa. It’s important to note that other forms of leverage exist in the market besides margin debt as total stock market leverage is higher than margin debt (margin debt is the only regularly reported type). With that being said, FINRA will report the July margin debt data on August 28th, the bulls will be looking for a figure above $681.23 billion.
Leave a Comment
You must be logged in to post a comment.
