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<p>Margin debt climbed in June for the eighth straight month as investors continue to borrow on margin to buy stocks.&nbsp; Historically, peaks in margin debt as a percent of nominal GDP have preceded or coincided with peaks in the stock market.&nbsp; While this measure of leverage continues to make new all-time highs, today’s extreme level of margin debt is indicative of speculative appetite and elevated market risk.&nbsp; When margin debt as a percent of nominal GDP peaks and moves decisively lower it will increase the probability that a major top will be near or possibly already in place.</p>
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