The June decline points to investors carrying unusually high margin debt relative to cash, a setup that can amplify forced selling if leverage unwinds quickly.
Net credit balances in brokerage accounts fell by $70 billion in June to a record low of -$1.06 trillion. The move indicates investors are carrying historically elevated margin debt relative to cash, underscoring a highly leveraged market backdrop. When leverage becomes this stretched, rapid unwinds can trigger forced deleveraging and sharper market swings as investors sell assets to meet margin requirements.