Strategist names the only ‘top prerequisite’ preventing stock market crash
Bloomberg Intelligence strategist Mike McGlone has warned that the resilience of Bitcoin (BTC) could be the key factor preventing a U.S. stock market collapse similar to past deflationary downturns. His Analysis suggests that staying elevated may be the market’s last line of defense against a broader economic correction following the inflationary surge of recent years, McGlone said in an X post on October 19. “Staying lofty might be a top prerequisite for the US stock market to avoid a typical deflationary downturn following inflation,” McGlone said. S&P 500 – GDP chart. Source: Bloomberg McGlone pointed to the equity market’s current valuation of about 2.3 times nominal GDP, a level that implies the stock market is the economy. Historically, such extended valuations tend to revert toward more sustainable levels, around 1.75 times GDP, which marked the post-2020 equilibrium. The strategist added that persistent weakn...