Decomposing soon deflates the bubble of optimism about further gains.
The boom in the market for leveraged loans, a favorite financing source of private-equity-backed companies, has created vulnerabilities in the global financial system, according to a report from international regulators.
A limited number of big banks are most exposed to these markets because they arrange the loans and hold some of them while also offering borrowers revolving credit facilities, according to the Financial Stability Board, a collection of global central-bank officials.
The Federal Reserve Bank of New York added roughly $57.5 billion in temporary liquidity to financial markets Thursday.
Options traders are paying up for bets that would profit if the S&P 500’s record run came to a halt.