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Bloated company balance sheets signal trouble for stock market’s record run

“The ratio of non-financial corporate debt to GDP stood at 73.2% in the second-quarter of 2017, a near-record, according to data from the Federal Reserve Board” writes Sunny Oh for Aversion to highly leveraged companies is increasingly visible,” said the analysts, led by head of quantitative equity research, Andrew Lapthorne.With investors exercising care in their stock picking, equities have seen a wide divergence in performance this year.For those still holding the weak companies, the relative performance consequence is painful, leading to further selling and further polarization,” the strategists said.

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