Bloomberg: Gold and The S&P Can Meet at $3000 in 2024

The catch: oil has to go to $150

Parts of this have been spotted circulating amongst folks who read Bloomberg yesterday. We sent it to Founders on Oct 18th.

Here it is again since there is renewed interest.

We added contextual titles so noone would fall victim to click-bait

Enjoy

If Oil Goes to $150, Both Gold and The S&P May Meet at $3000.

(Bloomberg Intelligence) -- That the $77.80 a barrel WTI crude oil 2023 average to Oct. 17 is about half of some outlooks from last year may portend the high-price cure and global recession tilt. If a supply shock spikes crude toward $150, the enduring relationship with the S&P 500 would imply about $3,000. Gold might meet the index at about that level in a recession. (10/18/23)

1. What's a Problem With $150 Oil? A 3,000 S&P 500

The mean, median and mode of the S&P 500 (SPX) to WTI crude oil ratio around 20x for almost a century may portend index risks if crude spikes to $150 a barrel. Oil advancing to this level and pressuring the SPX dropping toward 3,000 would represent simple reversion. Before the pandemic and biggest liquidity pump in history, the 2019 SPX average was 2,913. Our scenario is the under on crude to do what's typical when it spikes at the velocity of 2022, fueling global recession, the effects of aggressive central-bank tightening and a US net exporter paradigm shift.