Black Monday s stock

Billy Odell Tucker-Robinson Founder & Host — Banking With Billy Network • Intelligence Network • Data Science • AI Research • World News
Published: 2026-09-24T11:10:16.086Z • Permanent link

Larry McDonald, the chief investment strategist at BNY Mellon, has been warning of a potential paradigm shift in the fixed-income market, where bonds begin to deliver returns comparable to those of equities. This phenomenon bears striking resemblance to the events of Black Monday in 1987, when global markets experienced a sharp decline in value. During that period, the Dow Jones Industrial Average plummeted by 22.6%, and the S&P 500 fell by 20.5%. The trigger for this sell-off was a combination of factors, including high interest rates, a strong US dollar, and a speculative bubble in the stock market.

The similarities between the 1987 Black Monday and the current market environment are becoming increasingly apparent. In the summer of 1987, bonds were offering yields that were comparable to those of equities, a situation that led to a surge in speculative activity and ultimately contributed to the market's collapse. Similarly, in the present day, bonds are starting to deliver returns that are more in line with those of equities, which could lead to a similar speculative fervor. This time, however, the market's response may be more muted, given the increased awareness of the risks associated with fixed-income investments.

The catalyst for this shift in bond yields is believed to be the increasing popularity of bond ETFs and other passive investment products. These products have made it easier for investors to gain exposure to the bond market, which has led to a surge in demand for fixed-income securities. As a result, yields have begun to rise, and investors are starting to take notice. The implications of this trend are far-reaching, and it will be interesting to see how the market responds in the coming months.

The impact of this trend on the bond market will be significant, with far-reaching consequences for investors, financial institutions, and the broader economy. For companies that rely heavily on bond issuances to fund their operations, this trend could have a major impact on their bottom line. Research communities will also need to adapt to this new reality, as the traditional models used to analyze bond yields and returns are no longer applicable.

The effects of this trend will also be felt in the markets, where investors will need to adjust their strategies to account for the changing yield landscape. This could lead to a shift away from traditional bond investments and towards more equity-like products, such as ETFs and index funds. The implications of this trend will also be felt in the policy environment, as regulators will need to consider the potential risks and opportunities associated with the increased use of bond ETFs and other passive investment products.

The current trend in bond yields is part of a larger pattern of market shifts that have been unfolding over the past decade. The rise of passive investment products, the increasing popularity of ETFs, and the growing awareness of the risks associated with fixed-income investments have all contributed to a changing landscape for investors. This trend is also closely tied to the broader economic environment, where low interest rates and a surge in global debt have created a perfect storm of market volatility.