Investors are using a record amount of borrowed money to bet on stocks.

Why it matters: Trading with borrowed money — known on Wall Street as "margin" — can amplify both returns on the way up and losses if the market turns.

• Even investors who do not trade on margin should watch it: Borrowed money has played a key role in market crashes, from 1929 to the dot-com bust.

State of play: Through the end of April, net margin debt hit more than 1.25% of U.S. market cap, near the highest level in records stretching back to 1997.

The big picture: It's just one of the metrics causing some to question the sustainability of the market's AI-driven boom. Others include:

• Long-term measures of market valuation like Yale professor — and Nobel laureate — Robert Shiller's Cyclically Adjusted Price-to-Earnings ratio (CAPE) are at highs not seen since just before the dot-com crash.
• The market's valuation as a share of U.S. GDP — sometimes known as the Buffett Indicator because Warren Buffett often cited it — is the highest on record.
• As we mentioned yesterday, the stock market seems to be offering skimpy returns compared with bonds, a state of affairs that's sometimes signaled poor returns to come.
• And speculative trading activity seems to be picking up, with bullish trading of options (as measured by put-call ratios) and leveraged ETFs gathering momentum.

What they're saying: "Whether we're in a bubble is a very common question from investors, and there are a number of ways to address that," said Ben Snider, Goldman Sachs' chief U.S. equity strategist.

• He added: "I think it's fair to say the increase in leveraged retail trading activity does point in the direction of signals that would warrant some caution."

Yes, but: As compelling as these measures of market exuberance may seem, their record as timing mechanisms — that is, as guides for when to buy and sell — is pretty terrible.

• Shiller's CAPE ratio, for example, has signaled market overvaluation for almost all of the last decade.
• Anyone who sold when it broke out of its previous range in late 2016 would have missed out on an over 200% rise in the S&P 500.

Case in point: Goldman Sachs' Snider doesn't find the current levels of market enthusiasm off-putting.

• Yesterday, he raised his year-end S&P 500 target to 8,000 (it was previously 7,600), implying a gain of 16.9% in 2026. He cited the strength of corporate earnings, wrinkles and all, as a reason for continued optimism.

The bottom line: Stocks are probably a bit frothy and could be due for a correction. But timing the markets is incredibly hard.

Speaking of buying on margin: An increasing share of regular folks in South Korea are going all in on the country's stock market — borrowing money so as not to miss out on the AI-fueled stock boom there.

Why it matters: The entire economy is now hanging on the success of a few chipmakers.

The latest: South Korea's KOSPI index, which crossed 8,000 for the first time on Tuesday, is up 207% from a year ago.

• A few big, newly minted trillionaire chipmakers are behind the surge, including SK Hynix and Samsung.

The big picture: A mania for stocks has swept the country, as Bloomberg reported earlier this year.

Zoom in: And retail traders are borrowing to fuel the buying binge: Margin loans are at a record high, according to reporting earlier this month in the Korea Times.

• Middle-aged and older Koreans are increasingly getting in on this — borrowing money so as not to miss out, "mirroring" younger generations but "often with larger sums at stake."

Threat level: Some of these folks are risking retirement money with leveraged bets — Korea already has a high poverty rate (40%) for older adults.

• If the AI trade falters, the country's entire economy is on the line, writes Ed Yardeni at Yardeni Research.
• "Asia's fourth‑largest economy increasingly resembles a giant leveraged bet on AI."

The bottom line: What could go wrong? See Matt's piece above.

The CEOs of the country's biggest companies lost confidence in the economy this month as the Iran war dragged on, a new survey finds.

Why it matters: Business leaders without confidence tend to pull back on hiring and investment, weighing further on the economy.

Zoom in: CEO confidence fell 12 points in the second quarter of the year to 47, per the survey from The Conference Board, a nonpartisan think tank, and The Business Council, an association of CEOs.

• A number below 50 signals negative sentiment.
• 141 Fortune 500 chief executives participated in the survey, conducted from May 4 to May 18, the war's third month.

The big picture: The CEOs, they're just like us.

• American optimism about the economy is also in the dumps, as numerous surveys have found recently.

Yes, but: That hasn't troubled stock investors. And CEOs haven't yet changed their plans around capital investment — an increasing share said they planned to increase that spending in the year ahead.

Finally, the first of what we hope to be regular respects paid to the groan-inducing puns published by Wall Street analysts.

Case in point: The above example, from the good folks at Bank of America Securities, appears to be a reference to SpaceX's out-of-this-world estimate of its total addressable market — $28.5 trillion! — which Emily also riffed on this week.