Stock Market Indicators: Margin Debt

Stock Market Indicators: Margin Debt

Yardeni Research, Inc.

August 1, 2022

Dr. Edward Yardeni

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Mali Quintana

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Table Of Contents Table Of Contents

Margin Debt

3-6

August 1, 2022 / Stock Market Indicators: Margin Debt

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Margin Debt

Figure 1.

960

50

900 MARGIN DEBT & WILSHIRE 5000

840

780 Margin Debt*

720

(billion dollars) (683.4)

660

600

Wilshire 5000 Market Cap

540

(trillions) (41.1)

7/29 40

Jun 30

480

420 20

360

300

240

180

10

120

60



0

0

79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 25

* Debit balances in margin accounts at broker/dealers. Beginning in 1997 data are debit balances in customers' securities margin accounts. Note: Shaded red areas are S&P 500 bear market declines of 20% or more. Yellow areas show bull markets. Source: New York Stock Exchange through December 1996, FINRA thereafter, and Haver Analytics.

Figure 2.

3.0

3.0

MARGIN DEBT*

2.8 (as a percent of Wilshire 5000)

2.8

2.6

2.6

2.4

2.4

2.2

2.2

2.0

2.0

1.8

Jun

1.8

1.6

1.6

1.4

1.4

1.2

1.2



1.0

1.0

95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

* Debit balances in margin accounts at broker/dealers. Note: Shaded red areas are S&P 500 bear market declines of 20% or more. Yellow areas show bull markets. Source: New York Stock Exchange through December 1996, FINRA thereafter, and Haver Analytics.

Page 3 / August 1, 2022 / Stock Market Indicators: Margin Debt

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Margin Debt

Figure 3.

400

400

350

MARGIN DEBT* (yearly change, billion dollars)

350

300

300

250

250

200

200

150

150

100

100

50

50

0

0

-50

-50

-100

-100

-150

-150

-200

Jun

-200

-250

-250



-300

-300

95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

* Debit balances in margin accounts at broker/dealers. Note: Shaded red areas are S&P 500 bear market declines of 20% or more. Yellow areas show bull markets. Source: New York Stock Exchange through December 1996, FINRA thereafter, and Haver Analytics.

Figure 4.

100

100

MARGIN DEBT* (yearly percent change)

50

50

0

0

Jun



-50

-50

95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

* Debit balances in margin accounts at broker/dealers. Note: Shaded red areas are S&P 500 bear market declines of 20% or more. Yellow areas show bull markets. Source: New York Stock Exchange through December 1996, FINRA thereafter, and Haver Analytics.

Page 4 / August 1, 2022 / Stock Market Indicators: Margin Debt

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Figure 5.

1000

MARGIN DEBT & S&P 500

800

600

Margin Debt

Margin Debt* (billion dollars) (683.4) S&P 500 Market Cap (33.9)

50

40 J7u/2n7

30

400

20

200

10



0

0

95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

* Debit balances in margin accounts at broker/dealers. Note: Shaded red areas are S&P 500 bear market declines of 20% or more. Yellow areas show bull markets. Source: New York Stock Exchange through December 1996, FINRA thereafter, and Standard & Poor's.

Figure 6.

4

4

MARGIN DEBT (as a percent of S&P 500 market cap)

3

3

Jun

2

2



1

1

95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

* Debit balances in margin accounts at broker/dealers. Note: Shaded red areas are S&P 500 bear market declines of 20% or more. Yellow areas show bull markets. Source: New York Stock Exchange through December 1996, FINRA thereafter, and Standard & Poor's.

Page 5 / August 1, 2022 / Stock Market Indicators: Margin Debt

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Margin Debt

Figure 7.

950

3000

900 MARGIN DEBT & RUSSELL 3000

850

800

750

Margin Debt*

7/29

(billion dollars)

700

Jun

650

Russell 3000 Index

2000

600

550

500

450

400

350

1000

300

250

200

150

100



50

0

95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

* Debit balances in margin accounts at broker/dealers. Beginning in 1997 data are debit Balances in customers' securities margin accounts. Note: Shaded red areas are S&P 500 bear market declines of 20% or more. Yellow areas show bull markets. Source: New York Stock Exchange through December 1996, FINRA thereafter, and Wall Street Journal.

Figure 8.

1200

1200

1150 MARGIN DEBT & S&P 1500

1150

1100

1100

1050

1050

1000

1000

950

S&P 1500 Composite Index

7/29

950

900

Margin Debt*

900

850

(billion dollars)

850

800

800

750

750

700

Jun

700

650

650

600

600

550

550

500

500

450

450

400

400

350

350

300

300

250

250

200

200

150

150

100

100

50

50

95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

* Debit balances in margin accounts at broker/dealers. Note: Shaded red areas are S&P 500 bear market declines of 20% or more. Yellow areas show bull markets. Source: New York Stock Exchange through December 1996, FINRA thereafter, and Haver Analytics.

Page 6 / August 1, 2022 / Stock Market Indicators: Margin Debt

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