U.S. market investors are still chasing the popular narrative driving the market up: artificial intelligence

US market investors continue to chase the popular narrative driving the market rally: artificial intelligence. Market sentiment also remains buoyed by this upward trend. Similar to China, whenever market enthusiasm is high, the margin balance—money borrowed by investors to buy stocks—surges. In the past year, the margin balance of US investors has increased by 54%. Looking at data from the past 30 years (since 1999), the current margin scale has reached a rarely seen historical level, previously only occurring during the late phases of a few bull markets: before the 2000 internet bubble, before the 2007 financial crisis, and in the final stages of the 2021 helicopter money era. This is also one of the most effective indicators of the stock market's "animal spirits" (investor optimism and risk appetite). In a recent interview this year, Buffett compared the current US stock market to "a church with an attached casino." In his more than sixty years of investing, Buffett said he has "never seen people as gripped by gambling fervor as they are now." Of course, this doesn't mean the investment environment has deteriorated; rather, it means "the prices of many assets may have become extremely unreasonable." Chart data source: Finra