After the Leopold/SALP deleveraging in July...
Leverage being used by hedge funds and asset managers has rebounded close to 2026-highs.This is quite evident in the AUM ratio of leveraged equity ETFs to the market cap of the underlying stocks -- which has increased in recent weeks.Most notably for Semis (ex. memory) and Hyperscaler single stock leveraged ETFs. The ratio for Memory stocks hasn't increased in the same way, but it's still high.I think this could be a potential headwind for stocks and a source of volatility if leverage levels become excessive once again.Not to be a doomer, but one to keep an eye on...The copyright of this article belongs to the original author/organization.
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