Halfway through 2025, a chilling forecast cuts through market optimism: Bloomberg Intelligence’s Mike McGlone sees the year as the potential precipice of a significant stock market plunge.
“Brace for impact? Bloomberg’s Mike McGlone sent tremors through the markets with an X post on August 2nd, forecasting a potential 50% stock market plunge by 2025 – a chilling echo of the downturns seen since the millennium.”
August arrived with a stumble for Wall Street as a cocktail of disappointing jobs numbers and fresh trade war volleys from the White House soured investor moods. The S&P 500, a key market bellwether, reflected the anxieties, sliding 1.6% to close at 6,238, signaling a potentially turbulent month ahead.
According to McGlone, market behavior throughout 2025 has been marked by growing caution and shifting capital flows.
Forget the roller coaster; lately, markets feel more like a runaway train. Traditional safe havens like gold and U.S. Treasury bonds are shining, leaving higher-risk investments in the dust. Surprisingly, cryptocurrencies, despite a seemingly perfect economic backdrop, are struggling to keep pace.
Assets to watch out for
McGlone now expects gold and bonds to continue outperforming, with speculative assets like crypto taking the brunt of the correction.
“Strap in, Wall Street. According to McGlone’s latest forecast, 2025 could be the year the bull market stumbles. He predicts a potential 50% plunge in US stocks, echoing the drawdowns of the early 2000s and 2008. Where’s the safe harbor? McGlone’s pointing to gold and T-bonds as the likely winners, while cryptos could be facing a brutal reckoning.”
“Here’s the strategist’s take: the Bloomberg Galaxy Crypto Index is deadlocked with the S&P 500 this year. Crypto’s supposed to be a rocket ship, not a rowboat. This flatline isn’t stability; it’s a distress signal.”
To bolster his argument, he drew a compelling parallel: the dance between Wall Street’s fear gauge the VIX’s 200-day moving average and the risk-reward seesaw of the Gold-to-S&P 500 ratio.
Is the market flashing gold? The gold/SPX ratio, a historical harbinger of stock market storms, is on the rise in 2025. Are investors quietly fleeing risk, trading their stocks for the safe haven of gold? This subtle shift could be a warning sign – a prelude to a significant market correction.
Echoes of crashes past resonate in today’s market. The ghosts of 2008’s financial earthquake and 2020’s pandemic plunge whisper a warning: if history rhymes, 2025 could be the overture to a long, sobering equity reckoning.
Featured image via Shutterstock
Thanks for reading 2025 to mark start of major stock market drawdown warns strategist
