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Yahoo
14 minutes ago
- 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
19 minutes ago
- Yahoo
Why FuboTV Stock Skyrocketed 206% in the First Half of the Year
Fubo soared on its merger announcement with Hulu + Live TV The move will triple Fubo's subscriber base, leading the stock to roughly triple. The business still faces challenges, including its lack of profitability. 10 stocks we like better than fuboTV › Shares of FuboTV (NYSE: FUBO) soared in the first half of the year, as the company agreed to a merger with Walt Disney (NYSE: DIS). According to data from S&P Global Market Intelligence, the stock finished the first half of 2025 up 206%. The stock's gains came entirely from news of the merger, as the Disney deal, which will merge Fubo with Hulu + Live TV, values the sports streaming stock significantly higher than what it was trading for before the news. However, there was also other news out of Fubo, and the stock did pull back modestly following the merger announcement in January. As you can see from the chart, the stock soared on the announcement at the beginning of the year, and then drifted lower before rebounding with the broad market in May and June. The big news out on Fubo this year was, of course, the merger with Hulu + Live TV. According to the terms of the deal, Disney will own 70% of the combined company, which will continue trading under the Fubo ticker. The deal also resolved outstanding litigation between the two companies at the time, which was related to the Venu Sports joint venture that was later disbanded. The stock tripled on the news, because the move will triple Fubo's viewing audience, and Fubo will also receive a $220 million payment as a result of the agreement. While the move does make Fubo a significantly larger company, it might not be the simple value add that investors hope it will be. Fubo continued to be unprofitable into 2024, reporting an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss narrowed from $201 million to $86.1 million, while revenue grew 8% to $431.8 million. In the first quarter, meanwhile, revenue rose 3.5% to $407.9 million, and sees revenue declining in the second quarter. Additionally, the Department of Justice announced an investigation into the deal on antitrust grounds in April. Investors are still betting that the deal will go through, as the stock recovered strongly through May and June. The merger does appear to be the best outcome for Fubo, and Disney's reach, expertise, and experience with ESPN could help drive its success in the meantime. However, even if the deal stays on track, investors should expect the stock to be volatile, as the business is still losing money. Before you buy stock in fuboTV, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and fuboTV wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $674,432!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,005,854!* Now, it's worth noting Stock Advisor's total average return is 1,049% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of July 7, 2025 Jeremy Bowman has positions in Walt Disney. The Motley Fool has positions in and recommends Walt Disney and fuboTV. The Motley Fool has a disclosure policy. Why FuboTV Stock Skyrocketed 206% in the First Half of the Year was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
23 minutes ago
- Yahoo
Why Boeing Retired Its Iconic C-17 Globemaster III
Boeing is reportedly considering resuming production of its C-17 Globemaster III jet, discontinued in 2015. That's going to be quite a trick since the Long Beach, California factory that made the plane has long been shuttered and is currently for sale. That said, some of the equipment and assembly lines might be salvaged and relocated to a new facility, which raises the question of why the supersized cargo hauler was discontinued to begin with. Few jets besides the Lockheed C-5M Galaxy can match the C-17's 164,000-plus-pound cargo capacity or its range of 6,230 nautical miles when empty. However, the C-17 has an advantage over the C-5M Galaxy because of its more compact footprint, which allows landings on remote, undeveloped runways as short as 3,000 feet. Its brace of four Pratt & Whitney turbofan engines make 40,440 pounds of thrust each. Converting that thrust figure to horsepower, we come up with about 223,444 horsepower at the jet's cruising speed of 450 knots (518 mph). The contents of the C-17's voluminous cargo hold could range from humans to military vehicles like tanks and helicopters. It's ironic that recent conflicts like Russia's war against Ukraine and flare-ups in the Middle East have rekindled interest in the C-17, because most of the reason it was discontinued was lack of demand. That's not unlike the fate of another famously large aircraft, the Boeing 747 passenger jet, which is mostly gone from commercial flight except for these airline holdouts. Read more: You'd Only Drive These Cars If They Were Free Development of the C-17 was begun in the 1980s by McDonnell Douglas, which Boeing later acquired. Test flights commenced in 1991 and by 1995, the first squadron was declared operationally ready. Fast forward to 2013, by which time the U.S. Air Force's entire purchase order was complete, although a few international buyers' planes had yet to be completed. Meanwhile, the 2011 Budget Control Act led to significant cuts in U.S. defense spending that weren't ideal for the future of the C-17, which was expensive both to purchase and maintain. For example, charging $151,000 for soap dispensers that should have cost about $2,000. The Department of Defense put it blandly in its 2010 budget request: "DOD does not need additional C-17 aircraft. Therefore we are ending production under this program." Boeing manufactured a total of 279 C-17 Globemaster III aircraft, and the company says 275 of them are still in service. The Air Force is the largest operator, with 223, while the remainder are scattered all over the globe. In 2003, the C-17 inserted almost 1,000 soldiers at once via parachute during Operation Iraqi Freedom. Besides combat missions, the C-17 also aided humanitarian relief efforts with cargo like food and medical supplies following natural disasters in Japan, Haiti, and other locations. Want more like this? Join the Jalopnik newsletter to get the latest auto news sent straight to your inbox... Read the original article on Jalopnik.
