---
title: "Black Monday’s stock-market warning signal came from the bond market, and it’s back, says Wall Street veteran"
description: "Equities are starting to deliver “equity-like returns,” according to Larry McDonald, similar to during the summer of 1987."
author: "Nora Redmond"
section: market-watch
published: 2026-09-24T10:07:01.978869+00:00
canonical: https://valorandventures.media/article/d50a6855-fd48-4d2d-b7d1-e4672e6bc358
publisher: "Valor & Ventures Media"
source: "MarketWatch"
source_url: https://www.marketwatch.com/story/black-mondays-stock-market-warning-signal-came-from-the-bond-market-and-its-back-says-wall-street-veteran-52f12e39?mod=mw_rss_topstories
access: free
---

# Black Monday’s stock-market warning signal came from the bond market, and it’s back, says Wall Street veteran

*Equities are starting to deliver “equity-like returns,” according to Larry McDonald, similar to during the summer of 1987.*

## Executive Summary

A veteran of Wall Street has issued a significant warning regarding a historical stock-market indicator that has recently re-emerged from the bond market. According to a report by MarketWatch, financial expert Larry McDonald has identified market behaviors that closely parallel the conditions leading up to the infamous "Black Monday" crash of 1987. This warning comes at a time of heightened market scrutiny, suggesting that the relationship between fixed-income assets and equities may once again be signaling underlying systemic risks. The warning focuses on specific performance patterns currently visible across major asset classes. The outlet reports that equities are beginning to yield what McDonald characterizes as "equity-like returns," a trend that closely mirrors the investment climate observed throughout the summer of 1987. In the historical context of that year, subtle shifts within the bond market ultimately served as the primary catalyst for one of the most severe single-day market downturns in financial history, known as Black Monday. By highlighting these structural similarities, the veteran analyst suggests that current market participants may be overlooking critical pressures reminiscent of that pre-crash era. Understanding these warning signs requires a close examination of how capital flows between debt and equity instruments during periods of economic transition. Historically, when bond market dynamics begin to shift in ways that mimic or compete with equity performance, it often signals a fundamental misalignment in risk pricing across the broader financial system. Although the brief assessment from the veteran observer does not project a specific timeline or outcome, the direct comparison to the 1987 summer period serves as an advisory that the stability of global equity markets remains deeply tethered to the health and behavior of fixed-income yields. For the executives, business founders, and veteran leaders who make up the Valor & Ventures audience, this development highlights the critical importance of monitoring macro-level market indicators. In an era where rapid shifts in capital can impact corporate valuations and funding availability, understanding the historical precedents of market volatility is essential for strategic planning. This warning serves as a neutral, professional reminder that sustainable leadership requires a thorough understanding of systemic risks and a proactive approach to treasury and risk management.

## Article

Equities are starting to deliver “equity-like returns,” according to Larry McDonald, similar to during the summer of 1987.
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Nora Redmond · MarketWatch · Photo: Getty Images

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Originally published by MarketWatch: https://www.marketwatch.com/story/black-mondays-stock-market-warning-signal-came-from-the-bond-market-and-its-back-says-wall-street-veteran-52f12e39?mod=mw_rss_topstories