Friday’s global retreat from riskier assets exposes a vulnerability of the broad market advance of the past year and a half: the rising use of leverage, or borrowed money.
Traders said the Black Friday rout, which hammered stocks and energy prices from France to India to the U.S., doesn’t necessarily presage a broader pullback unless further bad news about the new variant of Covid-19 comes to light. But the reversal underscores the fragility of the rebound from the March 2020 lows, which ranks as the fastest return to record highs following a decline of at least 20% from a previous peak.
