Bloomberg Analyst Warns of Potential Market Correction Amid US Tariff War
Bloomberg commodity strategist Mike McGlone has issued a stark warning about a possible massive correction looming in the US markets. This correction, according to McGlone, could have a significant impact on the prices of assets such as Bitcoin (BTC), oil, and stocks.
The Warning Signs
McGlone points to the escalating tariff war initiated by President Trump as a potential trigger for market chaos. He highlights the US’s “self-correcting mechanism” that could push back against these policies, leading to a correction in various asset classes.
McGlone’s analysis includes a chart showing elevated levels in the S&P 500 vs. GDP ratio and the S&P 500 vs. gold ratio. Historically, such high levels have preceded major stock market crashes, reminiscent of the events in the 1930s, late 1990s, and 2008.
Predicted Drawdowns
The potential correction, or “reversion,” as described by McGlone, could result in significant drops across multiple assets. The analyst forecasts:
- 50% drawdown in the US stock market
- $40 a barrel crude oil
- $3 per pound copper
- 3% US 10-year yield
- $10,000 Bitcoin with 90% drawdowns in most cryptocurrencies
- $4,000 gold, an outlier due to its unique characteristics
Despite the severity of these predicted drawdowns, McGlone emphasizes that these potential downside moves are within normal historical parameters.
Current Market Status
As of the latest update, Bitcoin is trading at $87,529. The market continues to be on edge as investors monitor potential developments that could trigger the forecasted corrections.
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