Uh-Oh! Market Leverage At All-Time High

Uh-Oh! Market Leverage At All-Time High

Margin Debt



St. Louis Fed

Prologue

Big numbers continue showing up in U.S. economic data, partly due to the low levels of economic activity a year ago, partly caused by the reopening, and partly caused by the generosity of Uncle Sam. We've had three helicopter money drops, two of them in 2021. The economy is rapidly reopening as seen from the latest OpenTable data, which shows U.S. restaurants in late April down -20% to -30% vs. 2019 comps. This past February, these numbers were still in the -40% to -50% range. 



Labor Markets

The labor markets continued to show signs of life, as we expected, as the reopenings continue. State Initial Unemployment Claims (ICs) finally turned down after several weeks of lower ICs in the special Pandemic Unemployment Assistance (PUA) programs (special programs for the self-employed established by the CARES Act in May 2020). Those PUA program ICs for the last two reporting weeks (April 10 and 17) showed up at just over +130K, the lowest level, by far, since the PUA programs were initiated in May of 2020 (see the right-hand side of the chart). 

PUA ICs



Universal Value Advisors