Investors Hate Leverage Like It’s 2009, According to This Metric
- Long-short bet on indebted stocks tumbles amid rising rates
- Cash-rich technology stocks lead gains in U.S. stocks
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The expansive stock rally over the past year masks an ugly truth: investors are worried about corporate debt as tighter monetary policies loom.
A concentrated portfolio that bets on U.S. companies with the most leverage is on track to decline for a fifth consecutive quarter, the longest losing streak since 2009, according to a market-neutral Bloomberg index. European stocks with the weakest balance sheets show a similar story, with year-to-date losses piling up thanks to the February rout despite a reprieve last week.