Mike McGlone
Oil will open sharply higher. The stock market got back to unchanged on Friday, and this blockade news might bring significant sell tickets.
Bitcoin is down 3% as the only active risk asset trading, showing risk-off sentiment.
Mike McGlone
The key risk is President Trump might ban US oil exports to cap domestic prices, regardless of the global market.
The US is a net exporter, and Trump has a big problem with inflation. This would compress US prices but not help the rest of the world.
Mike McGlone
High oil prices are their own worst enemy. They can lead to demand destruction and ultimately a recession.
Spikes in diesel prices will shut down demand and adjust capital decision-making. The key trigger is consumer sentiment.
Mike McGlone
By the end of the year, the oil futures contract is more likely to go to $50 than $100, and that would be part of a stock market drop of 10-20%.
A global energy crisis can cause a post-inflation deflationary bust, similar to patterns in 2008.
Mike McGlone
Gold is no longer a safe haven; it's a highly volatile risk asset that will likely go down if the stock market goes down.
Gold had its best year since 1979 and was at a 50-year high versus treasuries in February. It is now correlated with risk-off moves.