Metals are stock puppets, Bloomberg strategist says
Mike McGlone says that the stock market now is the economy, and once it goes down, metals will crash with it.
Bloomberg Intelligence's senior commodity strategist, Mike McGlone, contends that the stock market currently dictates the performance of metals, describing them as "stock puppets" in the market. In an interview with MINING.COM host Devan Murugan on a recent Top of Mine episode, McGlone explained that metals' movements are heavily influenced by the stock market, with copper being the most susceptible.
He noted that during a market downturn, copper could drop by 20 or 30 percent. McGlone advised investors to exercise caution with gold, stating that its rise is a warning sign. He emphasized that gold's excitement usually signals a poor time for investment, as the market often peaks when investors are overly optimistic. The strategist also highlighted the Federal Reserve's recent decision to raise interest rates, praising the checks and balances that prevent the government from overreacting.
McGlone sees this as a positive step in combating inflation and stabilizing mortgage rates, which he views as the most pressing issue. However, he warned that the first sign of post-inflation deflation would likely be a decline in the stock market, potentially triggering a significant wealth effect throughout the country.
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