Mike McGlone: The Last Big Trade May Not Be the Next - Gold, Stocks and Bitcoin
The Competent InvestorShow Notes
Tom welcomes back Senior Commodity Strategist at Bloomberg Intelligence, Mike McGlone for a discussion on the outlook for energy, metals, and the broader macro markets. Diesel prices at all-time highs, driven by geopolitical disruptions and refining bottlenecks, are likely unsustainable. McGlone pointed to natural gas as a leading indicator: the January futures contract, the apex of the curve, has declined this year despite a supply glut, signaling downward pressure ahead for diesel, gasoline, and crude oil. The U.S. has become a massive net energy exporter, with record production and growing surpluses from Canada, Brazil, and Guyana, which will eventually overwhelm temporary supply constraints.
Mike expects energy prices to fall, potentially accelerated by political pressure ahead of midterm elections. Copper, trading near all-time highs, is a “sock puppet” to the stock market, highly correlated and overextended. Managed money positions are extremely long, and CME inventories are at record levels relative to global exchanges, suggesting a liquidation risk if equities correct. Gold, while at elevated levels, is flashing warning signals: its volatility and correlation with the S&P 500 are at extremes, and historically, when gold gets exciting, investors should be cautious. The metal’s outperformance versus the long bond and equities may indicate a peak, with a potential enduring top similar to 2007.
The U.S. stock market is historically expensive relative to GDP and debt, and McGlone sees a normal post-inflation deflationary reversion as likely. The next big trade may be long Treasury bonds, with the 30-year yielding over 5%, offering attractive risk-off value. Political cycles, tariffs, and the administration’s aggressive stance could accelerate a correction, and McGlone expects a significant shift in the midterms.
Overall, he advises caution across risk assets, favoring bonds and anticipating a period of mean reversion that could define trading opportunities in the coming months.
Timestamps: 00:00:00 - Introduction 00:00:40 - Diesel Prices at All-Time Highs 00:03:03 - Natural Gas as Leading Indicator 00:04:21 - Geopolitical Issues Impacting Energy 00:05:45 - US Energy Surplus and Reversion 00:07:30 - Crack Spreads and Production 00:13:44 - Treasury Bonds and Yields 00:17:20 - Copper Stock Market Correlation 00:23:44 - Equity Market Triggers 00:29:52 - Mid-Terms and Inflation 00:33:48 - Gold Signals and Concerns 00:37:22 - Silver and Metals Peaks
Guest:
Mike McGlone — Senior Commodity Strategist for Bloomberg Intelligence Mike McGlone is a senior commodity strategist for Bloomberg Intelligence, a unique research platform that provides context on industries, companies, and government policy, available on the Bloomberg Professional service at BI(GO). Mr. McGlone specializes in the broad investible commodity markets. Mr. McGlone joined Bloomberg in 2016 with over 25 years of futures and commodity trading and investing experience, beginning at the Chicago Board of Trade. Prior to joining Bloomberg, he was a head of US research at ETF Securities. Prior to ETF Securities, Mr. McGlone headed the commodity business at S&P Indices. His previous roles included head of futures research at ABN Amro and VP research, analyst, trader, sales at Aubrey G. Lanston / IBJ Futures.
Mr. McGlone has an MBA from DePaul University in Chicago and bachelor's of science and arts degrees from Illinois State University. He is a CFA Charter holder and has earned a Financial Risk Manager designation. X LinkedIn
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