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The stock market just blew through Warren Buffett’s favorite danger signal

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The U.S. stock market has just blown through Warren Buffett’s favorite economic indicator, stock market cap to GDP, setting a new all-time high. The valuation of the Wilshire 5000—which hit a record high on July 23—is now somewhere north of 212% of U.S. GDP, the “Buffett Indicator” shows.

Chart via LongTermTrends.Net

Perhaps that’s one reason stocks are selling off globally this morning. While most indexes in Asia and Europe remain near their all-time highs, there is broad-based but mild selling in all of them.

Goldman’s froth indicator is high

There’s another sign the markets may be near their top: Goldman Sachs launched a new “Speculative Trading Indicator” that measures froth by gauging trade volumes in “unprofitable stocks, penny stocks, and stocks with elevated EV/sales multiples”—the kind of trades that only look good when the market is rising irrationally. Sadly, “The most actively traded stocks include most of the Magnificent 7 along with companies involved in digital assets and quantum computing, among others,” Ben Snider and his team told clients.

“The indicator now sits at its highest level on record outside of 1998-2001 and 2020-2021, although it remains well below the highs reached in those episodes,” they said.

S&P futures, by contrast, were flat this morning premarket—so who knows where the Americans are going today.

The Fed may delay

No one expects the Fed to lower interest rates next Friday, despite President Trump’s continued pressure on Chairman Jerome Powell. (The video of the face-off between the two yesterday, in which Trump humiliates Powell and Powell corrects a false assertion by Trump, is a cringey must-watch.)

So investors are focused on September, October, and December. Sixty percent of speculators in the Fed Funds futures market currently think Powell will cut interest rates by 0.25% to the 4% level in September—a move that would deliver new cheap money into equities.

The problem for Trump is that in order to deliver that cut, inflation needs to stay low and the jobs market needs to not get stronger. Currently, inflation is moving up and the jobs market is robust but not perfect. That combo might push a rate cut to October or December—which would explain why investors are taking profits today rather than staying in the market.

“The jobs market continues to hold up despite concerns about a cooling economy, while officials remain nervous about the effect of tariff-induced price hikes on inflation. We see no interest rate cut this month, but the Fed is expected to start laying the groundwork for a move, most likely in December,” ING’s James Knightley and Chris Turner said in a note this morning. “As long as the jobs picture holds up, firmer inflation may well delay the restart of the Fed easing cycle.”

Trump’s tariffs are starting to contribute to inflation, UBS’s Paul Donovan told clients. “Consumers in Europe, the UK, Mexico, and Canada are paying between 0.3% and 1.9% less for the consumer appliances they buy than was the case in March of this year. The US consumer, meanwhile, is paying (on average) 3.6% more for their appliances than they were before Trump’s trade taxes,” he said in an email.

The capex boost is coming

And then, according to Piper Sandler’s Nancy Lazar and her colleagues, there’s a secret weapon hidden inside Trump’s One Big Beautiful Bill which could supercharge GDP growth (and thus, by implication, deter the Fed from cutting): Capex. 

A provision within the OBBB halves the effective rate of corporate tax and incentivises capital expenditure by companies. “Capex’s GDP punch is triple that of housing. Upside capex shocks add 1%+ to GDP. And every related goods producing job creates 6 more – the multiplier. Our preliminary (very preliminary) forecast for 2026 real GDP is about 3%,” they told clients.

With robust growth and tariff inflation still very much in the picture, perhaps stock investors are sensing that Powell will dig his heels in and delay rate cuts even longer than the futures market is currently assuming.

Here’s a snapshot of the action prior to the opening bell in New York:

  • S&P 500 futures were flat (+0.13%) this morning, premarket, after the index closed marginally up at a new all-time high of 6,363.35 yesterday. 
  • Tesla declined 8.2% yesterday after a lousy earnings call. 
  • STOXX Europe 600 was down 0.34% in early trading. 
  • The U.K.’s FTSE 100 was down 0.39% in early trading. 
  • Japan’s Nikkei 225 was down 0.88%. 
  • China’s CSI 300 Index was down 0.53%. 
  • The South Korea KOSPI was up 0.18%. 
  • India’s Nifty 50 was down 0.86%. 
  • Bitcoin fell 2.76% to $115K.



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Hero bystander who tackled Bondi gunman praised by Trump, Ackman

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A bystander who rushed and disarmed one of the Bondi Beach attackers has won praise from leaders around the world, including US President Donald Trump and hedge fund billionaire Bill Ackman, who announced a reward program for community heroes.

Extraordinary footage of the civilian’s actions began circulating on social media on Sunday, shortly after two men, later identified as a father and son, started shooting into a crowd gathered to celebrate the first day of Hanukkah. The massacre has left at least 16 people dead in the worst terrorist attack in Australia’s history. 

Read More: Sixteen People Killed in Bondi Beach Hanukkah Terror Attack 

In the mobile-phone video, which has not been verified by Bloomberg News, one of the attackers is standing near a tree and firing. A few meters away, a crouched man emerges from behind a parked car. He grabs the shooter from behind and wrestles the weapon from his hands. Local media named the bystander as Ahmed el Ahmed, a 43-year-old father-of-two from south Sydney. He was shot twice and is being treated in the hospital, according to reports.

He was also soon lauded for his feat. Trump said at the White House that Ahmed had saved many lives and expressed “great respect” for him. In Sydney, New South Wales Premier Chris Minns went further, describing Ahmed’s wrestle with the shooter as “the most unbelievable scene I’ve ever seen.”

“That man is a genuine hero and I’ve got no doubt there are many, many people alive tonight as a result of his bravery,” Minns said at a press conference late Sunday.

Australian Prime Minister Anthony Albanese also praised Ahmed, and other bystanders who helped treat victims in the immediate aftermath of the shooting. 

“People rushing towards danger to show the best of the Australian character,” Albanese told reporters Monday. “That’s who we are, people who stand up for our values.” 

Pershing Square Capital Management’s founder Ackman called Ahmed  “a brave hero” and said his hedge fund firm would establish a reward program for people who had carried out similar acts.

The top donor to a gofundme page set up for the “hero” who tackled the shooter is listed as William Ackman, who gave $99,999. More than $170,000 has been raised so far. 

Salesforce Inc. Founder and Chief Executive Officer Marc Benioff also expressed his gratitude for Ahmed in a post on X.



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A ‘new era’ in the housing market is about to begin as affordability finally improves

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Next year should mark a shift in the housing market after years of largely being frozen in place, according to Mike Simonsen, chief economist at top residential real estate brokerage Compass.

Home sales flatlined amid unaffordable conditions after rising demand collided with tepid supply growth, pushing up home prices. Would-be buyers became so discouraged that demand cooled and remains slow.

Prices are now becoming more favorable for house hunters, a trend that should continue in 2026 and change the narrative in the housing market.

“In the next era, that story flips. So sales are starting to move higher, but prices are capped or maybe down. Incomes are rising faster than prices, and so affordability improves for the first time in a bunch of years,” Simonsen told CNBC on Friday. “It’s not a dramatic improvement, but it’s the start of the new era.” 

His view echoes a recent report from Redfin, which also cited stronger income and weaker homes prices as it predicted a “Great Housing Reset” in 2026.

In addition to potential buyers giving up on finding an affordable home, sellers have been giving up on finding someone willing to buy at the price they want.

As a result, the number of homes that were withdrawn from the market jumped this year. In June, these so-called delistings shot up 47% from a year earlier.

Simonsen said listing withdrawals tend to be owner-occupied homes, meaning they could be latent demand as well as supply. That’s because two transactions would be needed: owners want to buy a new home but must sell their current one.

“In an environment where conditions improve a little bit, we actually estimate that that’s a representation of shadow demand—people that want to move, people that have delayed moves for maybe four years now,” he said, adding that there are about 150,000 such homeowners.

His housing market outlook for a new era of improving affordability doesn’t depend on a steep drop in mortgage rates. In fact, a plunge might spur so much demand that prices would overheat.

Simonsen expects rates to stay in the low-6% range, allowing sales to grow while also keeping home prices in check as more inventory comes on the market.

The price environment is already showing auspicious signs for prospective buyers. More than half of U.S. homes have dropped in value over the last year, but homeowners can still sell with a net gain as values are up a median 67% since their home’s last sale, accordion to data from Zillow.

And a separate report fromZillow found that homebuyers are getting record-high discounts. While the typical individual discount remains $10,000, desperate sellers are increasingly offering multiple reductions as muted demand leaves homes on the market for longer. As a result, the cumulative price cut in October hit $25,000.

“Most homeowners have seen their home values soar over the past several years, which gives them the flexibility for a price cut or two while still walking away with a profit,” Zillow Senior Economist Kara Ng said in a statement last month. “These discounts are bringing more listings in line with buyers’ budgets, and helping fuel the most active fall housing market in three years. Patient buyers are reaping the rewards as the market continues to rebalance.”



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Attacker who killed US troops in Syria was a recent recruit to security forces

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A man who carried out an attack in Syria that killed three U.S. citizens had joined Syria’s internal security forces as a base security guard two months earlier and was recently reassigned amid suspicions that he might be affiliated with the Islamic State group, a Syrian official told The Associated Press Sunday.

The attack Saturday in the Syrian desert near the historic city of Palmyra killed two U.S. service members and one American civilian and wounded three others. It also wounded three members of the Syrian security forces who clashed with the gunman, interior ministry spokesperson Nour al-Din al-Baba said.

Al-Baba said that Syria’s new authorities had faced shortages in security personnel and had to recruit rapidly after the unexpected success of a rebel offensive last year that intended to capture the northern city of Aleppo but ended up overthrowing the government of former President Bashar Assad.

“We were shocked that in 11 days we took all of Syria and that put a huge responsibility in front of us from the security and administration sides,” he said.

The attacker was among 5,000 members who recently joined a new division in the internal security forces formed in the desert region known as the Badiya, one of the places where remnants of the Islamic State extremist group have remained active.

Attacker had raised suspicions

Al-Baba said the internal security forces’ leadership had recently become suspicious that there was an infiltrator leaking information to IS and began evaluating all members in the Badiya area.

The probe raised suspicions last week about the man who later carried out the attack, but officials decided to continue monitoring him for a few days to try to determine if he was an active member of IS and to identify the network he was communicating with if so, al-Baba said. He did not name the attacker.

At the same time, as a “precautionary measure,” he said, the man was reassigned to guard equipment at the base at a location where he would be farther from the leadership and from any patrols by U.S.-led coalition forces.

On Saturday, the man stormed a meeting between U.S. and Syrian security officials who were having lunch together and opened fire after clashing with Syrian guards, al-Baba said. The attacker was shot and killed at the scene.

Al-Baba acknowledged that the incident was “a major security breach” but said that in the year since Assad’s fall “there have been many more successes than failures” by security forces.

In the wake of the shooting, he said, the Syrian army and internal security forces “launched wide-ranging sweeps of the Badiya region” and broke up a number of alleged IS cells. The interior ministry said in a statement later that five suspects were arrested in the city of Palmyra.

A delicate partnership

The incident comes at a delicate time as the U.S. military is expanding its cooperation with Syrian security forces.

The U.S. has had forces on the ground in Syria for over a decade, with a stated mission of fighting IS, with about 900 troops present there today.

Before Assad’s ouster, Washington had no diplomatic relations with Damascus and the U.S. military did not work directly with the Syrian army. Its main partner at the time was the Kurdish-led Syrian Democratic Forces in the country’s northeast.

That has changed over the past year. Ties have warmed between the administrations of U.S. President Donald Trump and Syrian interim President Ahmad al-Sharaa, the former leader of an Islamist insurgent group Hayat Tahrir al-Sham that used to be listed by Washington as a terrorist organization.

In November, al-Sharaa became the first Syrian president to visit Washington since the country’s independence in 1946. During his visit, Syria announced its entry into the global coalition against the Islamic State, joining 89 other countries that have committed to combating the group.

U.S. officials have vowed retaliation against IS for the attack but have not publicly commented on the fact that the shooter was a member of the Syrian security forces.

Critics of the new Syrian authorities have pointed to Saturday’s attack as evidence that the security forces are deeply infiltrated by IS and are an unreliable partner.

Mouaz Moustafa, executive director of the Syrian Emergency Task Force, an advocacy group that seeks to build closer relations between Washington and Damascus, said that is unfair.

Despite both having Islamist roots, HTS and IS were enemies and often clashed over the past decade.

Among former members of HTS and allied groups, Moustafa, said, “It’s a fact that even those who carry the most fundamentalist of beliefs, the most conservative within the fighters, have a vehement hatred of ISIS.”

“The coalition between the United States and Syria is the most important partnership in the global fight against ISIS because only Syria has the expertise and experience to deal with this,” he said.

Later Sunday, Syria’s state-run news agency SANA reported that four members of the internal security forces were killed and a fifth was wounded after gunmen opened fire on them in the city of Maarat al-Numan in Idlib province.

It was not immediately clear who the gunmen were or whether the attack was linked to the Saturday’s shooting.



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