U.S. STOCKS EXTEND GAINS, DOW JONES UP 2.00 PCT

Leveraged hedge fund positions in US Treasuries are heightening risks of abrupt unwinds that could stress global bond markets, Apollo Chief Economist Torsten Slok said. Funds now hold about 8% of the $31 trillion market, up from 3% five years ago, with repo and prime brokerage financing exceeding $6 trillion. Slok warned forced deleveraging could send shockwaves through fixed income. The concerns align with Henry Paulson’s call for contingency planning against a potential demand shock in US debt. Regulators have flagged risks in leveraged basis trades, which worsened market turmoil during the pandemic and required Federal Reserve intervention.

US STOCKS OPEN HIGHER: DOW +1.07%, S&P 500 +0.66%, NASDAQ +0.87%