McDonald Flags 'Red Flashing Signals' Similar to Black Monday on Fox Business

Market expert Lawrence McDonald has flagged several 'red flashing signals' on Fox Business that he warns are similar to those leading up to the 1987 global market crash known as Black Monday. The founder of The Bear Traps Report and former Lehman Brothers vice president appeared on Fox Business on August 18, 2026, with host Cheryl Casone.

McDonald pointed out that President Donald Trump's tariffs are producing weaker results, while bond markets are flashing warning signs globally. He noted that climbing interest rates are making bonds more attractive to investors, which can lead to a deterioration in the risk-reward ratio for stocks.

'We're getting diminishing returns on the tariffs, but on the bond side, this is a global story,' McDonald said. 'When bonds start to offer competitive returns relative to stocks, that's when the risk-reward deteriorates, it's very similar to the summer of '87.'

McDonald emphasized that investors should exercise caution, as historically, when bonds threaten stocks in this way, especially with global rates rising across the G7, it can lead to a significant market downturn. He referenced the 1987 crash, where the Dow Jones Industrial Average plummeted 22.6% on October 19 of that year.