Wall Street veteran warns bond market is flashing the same signal it sent before Black Monday

The bond market has a way of telling you things before the stock market is ready to listen. Larry McDonald, a former Lehman Brothers trader and founder of The Bear Traps Report, says it is talking right now, and the message sounds a lot like the summer of 1987. Speaking on the David Lin Report podcast on September 24, McDonald laid out a detailed comparison between today’s fixed-income dynamics and the conditions that preceded Black Monday, the October 19, 1987, crash that sent the Dow Jones Industrial Average down nearly 23% in a single session. What the bond market is actually saying Corporate bonds from Alphabet and Oracle are currently yielding above 7%, and Oracle’s long-term debt is in the 7% to 8% range, a level that could theoretically double an investor’s capital in roughly nine years. Alphabet issued a 100-year bond in February 2026, and that instrument has already fallen to around 87 cents on the dollar, pushing its yield above 7% as a result. McDonald’s phrase for it is blunt: bonds are beginning to “steal market share” from equities. Capital that might otherwise flow into stocks starts gravitating toward fixed income when the yield gap narrows enough to make the trade ...