Latest news with #LarryMcDonald
CNBC
6 days ago
- Business
- CNBC
Stocks are celebrating inflation's demise prematurely and the big money isn't buying, says Larry McDonald
(PRO Views are exclusive to PRO subscribers, giving them insight on the news of the day direct from a real investing pro.) The stock market and retail investors are celebrating an end to inflation worries prematurely on Tuesday, and the big money is not playing along, according to Larry McDonald of "The Bear Traps Report" — whose clients are some of the biggest hedge funds on the planet. There already was something off with the way financial markets were reacting to the July CPI report with the 10-year Treasury yield going higher after the numbers, while the Dow Jones Industrial average is rallying . Big institutional money on Wall Street is siding with the bond market and believes that inside of the CPI report were the signs of a growing comeback in inflation. They are looking at what's called "supercore" inflation, which removes food and energy, but also shelter and rent costs from the headline number. When that's taken out, inflation was running at a 3.21% rate last month, much higher than the 2.7% headline annual rate that was slightly less that economists expected and sparked the equity rally. "This could be like a nice relief rally today, but under the surface, inflation is just not coming down fast enough and that's not great for bonds," said McDonald, author of " How To Listen When Markets Speak. " Supercore "is one of the most important number's the Fed looks at. ... The bond market is really focused on supercore and you can't fake that," he said. This hidden inflation that's about to rear its head is "good for hard assets, good for gold, silver, platinum, palladium, copper," said McDonald. Big hedge funds are buying anything that comes out of the ground Tuesday, along with natural gas, he said. "The cheapest part of the market right now is natural gas," McDonald added, noting its key part in powering AI data centers. The investor and strategist pointed to the First Trust Natural Gas ETF (FCG) along with Antero Resources as ways to play along with the big money. (Watch the video above for the full conversation.)
Yahoo
13-07-2025
- Business
- Yahoo
Markets guru Larry McDonald warns of 'off the charts' complacency — and says Warren Buffett's stock sales are a red flag
Larry McDonald warned about inflation, complacency, and bank pressures in an interview with BI. The author and ex-trader said Warren Buffett slashing his Bank of America stake was a red flag. McDonald said tariffs and commodities may fuel price growth, and stock buyers are overlooking risks. Investors are too relaxed about falling inflation and booming stocks, while Warren Buffett may be sending a distress signal about the banks. That's according to former trader and author Larry McDonald, who told Business Insider in an interview that investor "complacency is off the charts." The author of "The Bear Traps Report" newsletter and the former head of US macro strategy at Société Générale said he expected surging microchip stocks to experience a "sharp snapback in the next two to three weeks." Nvidia rocketed nearly 70% in under three months to an unprecedented $4 trillion valuation, while rival Taiwan Semiconductor has soared around 60% to fresh highs over the same period, helping to lift the wider stock market to record levels. McDonald said banks were threatened by having on their books commercial real estate loans and multifamily mortgages that were issued at far lower interest rates than such loans would be now and are now worth much less on paper. These have left key lenders such as superregional banks "dramatically wounded," McDonald said. He suggested that some investors were turning a blind eye and focusing instead on the Trump administration's promises of deregulation. This has left bank stocks trading at valuations that are "extremely unusual historically," McDonald said. McDonald, who wrote "A Colossal Failure of Common Sense" about the collapse of Lehman Brothers, pointed to Buffett slashing his stake in Bank of America, which for years had been the legendary investor's second-largest holding after Apple. The Berkshire Hathaway CEO pared his position by almost 40% from over 1 billion shares to around 630 million in the nine months ended March 31. "He sees something," McDonald said. He speculated that Buffett, who's soured on lenders and exited several bank bets since 2020, is "probably selling a lot more now" and may have already cut the position to 500 million shares. Berkshire did not respond to a request for comment from BI, and investors will have to wait until Berkshire files its next portfolio update in mid-August to find out its latest BoA position. Buffett was lauded online earlier this year for selling more than $130 billion in stocks in 2024 and building a record cash pile before the market entered a correction. Headline inflation was 2.4% in May, only slightly above the Federal Reserve's 2% target, but McDonald disputed the idea it's under control. 'The Trump team wants to advertise low inflation because they see a window to cut," he said, referring to the president's campaign to pressure Fed Chair Jerome Powell to reduce interest rates. McDonald said rising prices for copper and other commodities could reignite inflation, and 'either tariffs or oil will start leaking' into it too, driving up bond yields in anticipation of the Fed raising rates and worsening banks' paper losses. He said that resurgent inflation could disproportionately harm the bottom 60% of Americans by income, pinching their pocketbooks like in the 1970s when consumers were "so wounded." McDonald also said credit-card companies charging interest rates as high as 29% are further squeezing households' finances, raising the risk of wider economic pain. McDonald has repeatedly warned of market crashes, recessions, and inflation in recent years, but stocks have marched to record highs and the economy has remained strong. Investors may be shrugging off genuine threats, but that bullishness has paid off so far. Read the original article on Business Insider
Yahoo
13-07-2025
- Business
- Yahoo
Markets guru Larry McDonald warns of 'off the charts' complacency — and says Warren Buffett's stock sales are a red flag
Larry McDonald warned about inflation, complacency, and bank pressures in an interview with BI. The author and ex-trader said Warren Buffett slashing his Bank of America stake was a red flag. McDonald said tariffs and commodities may fuel price growth, and stock buyers are overlooking risks. Investors are too relaxed about falling inflation and booming stocks, while Warren Buffett may be sending a distress signal about the banks. That's according to former trader and author Larry McDonald, who told Business Insider in an interview that investor "complacency is off the charts." The author of "The Bear Traps Report" newsletter and the former head of US macro strategy at Société Générale said he expected surging microchip stocks to experience a "sharp snapback in the next two to three weeks." Nvidia rocketed nearly 70% in under three months to an unprecedented $4 trillion valuation, while rival Taiwan Semiconductor has soared around 60% to fresh highs over the same period, helping to lift the wider stock market to record levels. McDonald said banks were threatened by having on their books commercial real estate loans and multifamily mortgages that were issued at far lower interest rates than such loans would be now and are now worth much less on paper. These have left key lenders such as superregional banks "dramatically wounded," McDonald said. He suggested that some investors were turning a blind eye and focusing instead on the Trump administration's promises of deregulation. This has left bank stocks trading at valuations that are "extremely unusual historically," McDonald said. McDonald, who wrote "A Colossal Failure of Common Sense" about the collapse of Lehman Brothers, pointed to Buffett slashing his stake in Bank of America, which for years had been the legendary investor's second-largest holding after Apple. The Berkshire Hathaway CEO pared his position by almost 40% from over 1 billion shares to around 630 million in the nine months ended March 31. "He sees something," McDonald said. He speculated that Buffett, who's soured on lenders and exited several bank bets since 2020, is "probably selling a lot more now" and may have already cut the position to 500 million shares. Berkshire did not respond to a request for comment from BI, and investors will have to wait until Berkshire files its next portfolio update in mid-August to find out its latest BoA position. Buffett was lauded online earlier this year for selling more than $130 billion in stocks in 2024 and building a record cash pile before the market entered a correction. Headline inflation was 2.4% in May, only slightly above the Federal Reserve's 2% target, but McDonald disputed the idea it's under control. 'The Trump team wants to advertise low inflation because they see a window to cut," he said, referring to the president's campaign to pressure Fed Chair Jerome Powell to reduce interest rates. McDonald said rising prices for copper and other commodities could reignite inflation, and 'either tariffs or oil will start leaking' into it too, driving up bond yields in anticipation of the Fed raising rates and worsening banks' paper losses. He said that resurgent inflation could disproportionately harm the bottom 60% of Americans by income, pinching their pocketbooks like in the 1970s when consumers were "so wounded." McDonald also said credit-card companies charging interest rates as high as 29% are further squeezing households' finances, raising the risk of wider economic pain. McDonald has repeatedly warned of market crashes, recessions, and inflation in recent years, but stocks have marched to record highs and the economy has remained strong. Investors may be shrugging off genuine threats, but that bullishness has paid off so far. Read the original article on Business Insider
Fox News
13-06-2025
- Business
- Fox News
Business Rundown: Middle East Escalations Muddle World Markets
World stock markets fell, and oil prices climbed on Friday, following Israel's wave of airstrikes on Iranian nuclear facilities and missile factories. FOX Business correspondent Lydia Hu is joined by The Bear Trap Report founder & author of 'How To Listen When Markets Speak,' Larry McDonald to analyze the impact this conflict has for Americans and what's behind the rallying consumer sentiment. Photo Credit: AP Learn more about your ad choices. Visit
CNBC
10-06-2025
- Business
- CNBC
Buy hard assets like gold ahead of a potential bond market panic, says Bear Traps' Larry McDonald
The potential issuance of more than $1 trillion in new government debt could make commodities a smarter defensive plays than bonds, according to "The Bear Traps Report" founder Larry McDonald. McDonald estimated that in the six months from September 1 through about February the U.S. is looking at about $1.5 trillion of new debt issuance from government. That would amount to about $600 billion more than last year, McDonald said, and the issue could be exacerbated by any delay in the tax-and-spending bill that recently passed the House of Representatives. The idea is that the large new issuances of bonds, and the forecasts for a continuing annual deficit of the federal government, would put more pressure on a bond market that has already seen volatile moves in yields so far this year. "We think $4 to $6 trillion is going to move from financial assets — which are just paper certificates, right, stock certificates, bonds — over to hard assets," McDonald said on " Squawk Box ." Those hard assets could be precious metals, like gold, silver and platinum, which have already performed well in 2025. McDonald also said that agricultural commodities could be an area to watch. "The old 60/40 portfolio should maybe be 30/30/30/10, in other words a much larger component of commodities," where the 30% slices are bonds, stocks and the commodities and the 10% piece is cash, he added. @GC.1 YTD mountain Gold futures YTD It can be difficult for individual investors to gain large exposure to hard assets directly, but there are many ETFs on the market that buy and hold commodities or commodity futures. For example, the Invesco DB Agriculture Fund (DBA) has about $860 million in assets under management, and SPDR Gold Shares (GLD) has about $100 billion in assets. To be sure, McDonald did not predict that a bond market panic will necessarily happen within the next 12 months. He said that Treasury Secretary Scott Bessent has been making moves to help the bond market. One of those is a potential change the supplementary leverage ratio, expected this summer, which would allow banks to hold more government debt on their balance sheets. McDonald is also the author of the new book "How to Listen When Markets Speak."
