Annual margin debt growth slowed to 31.4% in September from 53.7% in May, according to FINRA data cited by Bank of America. The slowdown in borrowing adds to other warning signs, including wider credit spreads on high-yield bonds and a rotation toward defensive sectors such as healthcare and consumer staples. September’s margin debt stood at $1.48 trillion, 1.5% below June’s record of $1.5 trillion, while elevated leverage could amplify any price decline by triggering forced sales. Bank of America argues that the midterms could nevertheless ease uncertainty and trigger a relief rally unless more severe downside risks materialize.
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