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- FINRA Board of Governors - Election Notice
- Trump Signs Biggest Rollback of Bank Rules Since Financial Crisis
- SEC Commissioners Hold Investor Town Hall in Atlanta
- SEC Proposes FAIR Act Rules to Promote Research Reports on MFs, ETFs, Other Funds
- FINRA Markup/Markdown Analysis Report - Phone Workshop, WebEx Presentation
- NASAA Announces Coordinated International ICO and Crypto Crackdown
- New York Investment Advisor Settles SEC Insider Trading Charges
- Supreme Court Backs Companies Over Worker Class-Action Claims
- Bank of America Introduces Erica, Its AI Financial Assistant
- Banks Are Getting Another Volcker Rule Win
- Citigroup to Pay $7.3Mn Fine for Substandard IPO Work
- FINRA Stretches Definition of Participating in a Private Securities Transaction - Bill Singer
- Post Mortem Auto-Pilot Trading Sends Stockbroker's Career into Head-On Regulatory Crash
- Wells Fargo Has Shown Us Its Contemptible Values
- UBS to Counter Trading Troubles With M&A Work
- SEC Moves Quickly To Shut Down Fake Pre-IPO Share Scam
- SEC Testimony: Oversight of the SEC Division of Enforcement
- FINRA Modifies 'Agency Debt Security' in Rule 6710
- Is Jamie Dimon Doing a U-Turn on Bitcoin?
- After New Yorker's Racist Rant Goes Viral, His Law Firm Gets Pummeled with 1-Star Yelp Reviews
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NEWSLETTERS & ALERTS
Wall Street News
Margin Loans Hit Record Levels – Red Flag?
Here’s yet another reason to be cautious about the Wall Street rally - or not. Margin debt, a measure of speculation, just broke a 2-year high according to the NYSE.
However, margin levels can be viewed in two, contradictory ways: (i) as a bullish sign that investors believe the market will continue to rise; and, (ii) as a bearish sign that investors are overexuberant about the market’s prospects – much like in 2000, just before the dot-com bubble burst. In the latter case, if a market selloff (or panic) ensues, margin investors will be first in line to unload their ‘extended’ holdings.
That said, many analysts, including BNY Mellon Wealth Management 's Jeff Mortimer, thinks that concerns of a major correction are overblown.
“This isn’t a signal to me that markets are reaching an exuberant level like they did in the 1920s or 1990s, when speculation was rampant,” he said. “What our clients are doing is borrowing against the portfolios because interest rates are so low. They’re not leveraging up because they see the market exploding to the upside; they’re using leverage because they can pay it off at any time.”
Stay tuned – ‘20-20 hindsight’ may indicate who’s correct.