Name: The ‘Lose-Lose’ Economy: Why Both Bulls And Bears Could Suffer | Mike McGlone
Uploaded: 2025-07-01T22:05:28+00:00
Duration: 1628 s

Speakers

Mike McGlone — Senior Commodity Strategist, Bloomberg Intelligence

Summary

Mike McGlone, Senior Commodity Strategist at Bloomberg Intelligence, joins David Lin to argue the U.S. stock market is dangerously overvalued and entering a lose-lose environment. He expects deflationary pressure to hit oil and Bitcoin, while gold rises as a warning signal and alternative store of value. He also sees stretched risk assets, concentrated U.S. equity returns, and crypto excess as vulnerable if the stock market rolls over.

Revised GDP and personal income show slowing while stocks hit record highs.
McGlone says markets are front-running fiscal stimulus and Fed easing.
He sees U.S. equities extremely expensive versus GDP, earnings, commodities, and global stocks.
Gold is favored as an enduring bull market and deflation warning indicator.
Oil is expected to fall to $40 on oversupply and weak China demand.
Bitcoin and the broader crypto space are seen as speculative and vulnerable.
Deflation is considered the bigger risk after inflation.
Treasuries and non-U.S. equities are mentioned as alternatives.

Ideas

Mike McGlone Senior Commodity Strategist, Bloomberg Intelligence 0:00

Bitcoin $100K is speculative ceiling

McGlone says Bitcoin's first close above $100,000 in December marked a speculative threshold similar to Nasdaq 5,000 in 2000. Since then gold has outperformed sharply while Bitcoin lags and the Bitcoin/gold ratio rolls over. Bitcoin trades as a high-correlation risk asset with equities and low correlation to gold; if the stock market tilts lower, Bitcoin could follow and potentially drop a zero, with the broader crypto space also at risk.

Mike McGlone Senior Commodity Strategist, Bloomberg Intelligence 1:37

U.S. stocks overvalued and risk rolling lower

McGlone warns the U.S. stock market is extremely stretched: market cap/GDP near 2.1x is the highest since 1929, the S&P 500 earnings yield is negative versus the 10-year Treasury for the first time since 2002, and top-52 concentration accounts for nearly all returns. The S&P 500/Bloomberg Commodity Spot Index ratio is also at a roughly 25-year low, another sign that stocks are the expensive outlier. He argues the rally is front-running fiscal stimulus and Fed easing, but rising stocks/Bitcoin keep inflation sticky and remove the Fed's room to ease; tariffs then hit earnings. With few alternatives and expensive risk assets, he expects a normal deflationary reversion and says risks are lower.

Mike McGlone Senior Commodity Strategist, Bloomberg Intelligence 3:08

Non-U.S. equities better than U.S. stocks

McGlone relays that U.S. equity returns are extremely concentrated, with the top 52 S&P 500 stocks accounting for nearly all gains, and argues there are alternatives outside the U.S. where growth and tax conditions are much better. This reinforces a preference for non-U.S. equities over expensive, concentrated U.S. stocks.

Mike McGlone Senior Commodity Strategist, Bloomberg Intelligence 3:45

Gold to rise as stocks roll over

McGlone views gold as an enduring bull market and the key warning asset. Gold is up about 25% YTD, cheap versus the S&P 500 relative to its historical 1:1 per-ounce ratio, and the Dow/gold ratio is rolling over like 1971. He sees the gold range at $3,000-$3,500, with a move above $3,500 as his base case and a sign of economic trouble/deflation; gold ETF inflows are strongest since 2023 after four years of outflows. If stocks roll over, gold should go higher.

Mike McGlone Senior Commodity Strategist, Bloomberg Intelligence 6:28

Oil heading to $40 on oversupply

McGlone expects WTI crude to fall to $40. He cites excess supply versus demand from OPEC and US/Canada, with the US/Canada surplus over 6 million b/d; China's crude imports have stalled near 11 million b/d and are ticking lower, partly due to tariffs and EV adoption, with 50% of China auto sales now EVs. Prices must break below the roughly $57 breakeven cost to clear the surplus, and since the 2008 $147 peak every cycle low has been around $40 or lower.

Mike McGlone Senior Commodity Strategist, Bloomberg Intelligence 9:48

Treasuries attractive versus overpriced U.S. stocks

As an alternative to an expensive U.S. stock market, McGlone notes investors can earn about 4.25% risk-free in Treasuries while the S&P 500 earnings yield is negative versus the 10-year note, the lowest since 2002. He sees deflationary forces building, which would support Treasuries as yields fall, making them an attractive relative allocation.

Mike McGlone Senior Commodity Strategist, Bloomberg Intelligence 13:41

Commodities may bottom versus stocks

McGlone says commodities may have bottomed relative to stocks: the S&P 500 divided by the Bloomberg Commodity Spot Index reached a roughly 25-year low, leaving room for mean reversion. However, he lacks a clean absolute commodity catalyst because crude is oversupplied, industrial metals are distorted by tariffs, and gold is doing most of the work holding the commodity index up. This is a relative setup to watch rather than a broad commodity long.

Mike McGlone Senior Commodity Strategist, Bloomberg Intelligence 22:05

Crypto index risks 90% drop

McGlone highlights the Bloomberg Galaxy Crypto Index as evidence of excess in the broader crypto space. There are now 18-19 million cryptocurrencies versus one in 2009, and the index is down about 15% this year even as the stock market is up 5%. He says the entire crypto space could drop 90% and still be legitimate, and Bitcoin's high correlation to other cryptos pulls it into that risk.

The ‘Lose-Lose’ Economy: Why Both Bulls And Bears Could Suffer | Mike McGlone

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