GM. This is Milk Road Macro, the newsletter that says we finished the rollercoaster just in time to get back in line.
Here’s what we got for you today:
- ✍️ Are we back in an “early cycle” environment?
- 🎙️ The Milk Road Macro Show: The Most Important Thing In Macro: How Investors Can Dominate in Q4 w/ Caleb Franzen
- 🍪 US PPI came in well below expectations for August
KGeN ensures your product reaches real users and drives real growth. Request a demo to grow your protocol.
Prices as of 8:00 AM ET.
ARE WE BACK IN AN “EARLY CYCLE” ENVIRONMENT?
Here’s a wild thought.
We’ve seen a “recession” in the US between early 2024 and early 2025.
And now we are back in an “early cycle” environment again (good news).
Sounds weird, but stick with me.
This will be a newsletter exploring the recent thoughts of Bloomberg’s Chief Economist Anna Wong.
She said this week that she thinks the US economy likely “entered a recession” last year.
So what are Wong’s thoughts?
What do I think?
Why didn’t asset markets “feel” this so-called recession?
And what does it all mean for markets going forward?
Let’s take a look…
Wong: “Recession started last year”
Earlier this week, the BLS Annual Benchmark Revision showed that the US economy produced 911,000 fewer jobs between March 2024 and March 2025 than was previously thought.
This was the second consecutive large annual revision - after we saw -818,000 in 2024.
After this news, Anna Wong, Chief Economist at Bloomberg, wrote that she thinks the US economy likely "entered a recession last year".
She explained that "the labor market was weak during spring and summer 2024”, and then “fell back into a slump in the first quarter of 2025”.
The Bloomberg economist noted that when all the revisions for 2024 and 2025 are complete - and we won’t get the final revisions until early in 2026 and 2027 - she thinks they’ll show "the business cycle peaked around April 2024".
But now, she thinks we might be “in the early phase of a new business cycle”.
What do I think?
Well, the most widely recognized definition of a “recession” is two consecutive quarters of negative GDP growth.
And we definitely didn’t get that.
I don’t really agree with the notion that we’ve seen any kind of “recession” in recent times.
But people can debate about exactly what a recession is and what it isn’t.
I’m more interested in the wider business cycle - and Wong’s comments about how we may now be back in an “early cycle” environment.
Something I have been outlining in this Macro PRO report is that my Global Economy Index signals an underwhelming “full cycle” between late 2022 and early 2025.
It shows the cycle peaking in early to mid 2024 and then bottoming in early 2025 - similar to Wong’s views.
And now it’s bouncing back strongly - and is currently signalling “early cycle”.
I think this is generally a contrarian view.
My impression is that most investors believe we are still in the late stages of the cycle that began in late 2022.
But I’ve been seeing this “full cycle” shape (upside-down “U” shape), between roughly late 2022 and early 2025, cropping up over and over again in various different charts:
- Earnings revision breadth (how many analysts are raising their S&P 500 earnings forecasts vs. cutting them) - denoted by the orange line.
- Positioning (whether investors are underweight or overweight equities).
- Global growth expectations (dark blue line).
- Sentiment among global Fund Managers
- CEO Confidence (capturing CEOs’ assessments of current economic conditions)
$33.6M ARR — BEFORE A TOKEN
Most Web3 projects launch with a token first and revenue later.
KGeN flipped the script with $33.6M+ in ARR before a token ever existed — cash-flow positive and growing month after month.
Here’s what makes KGeN different:
- 24+ months of consistent MRR growth
- 35.5M+ verified users driving acquisition, retention, and commerce
- Sustainable results, not inflated metrics
In a market dominated by hype, KGeN proves Web3 can be capital-efficient and revenue-driven.
👉 Ready to grow with real users and real revenue? Request a demo today.
ARE WE BACK IN AN “EARLY CYCLE” ENVIRONMENT? (P2)
The cycle is right there on all these charts, as clear as day.
A full cycle that started in roughly late 2022 and ended in early 2025, with a new one now potentially beginning.
This is in contrast to the US ISM Manufacturing PMI (Purchasing Managers Index) - which is often one of the favorite “cycle” measures.
Curiously, the PMI doesn’t show this most recent cycle.
It’s just been a mess - and has remained largely in “contraction” (below 50) for years.
But why didn’t markets “feel” this economic downturn?
The next question is - “so where was the downturn bear market”?
Let’s take a look.
What would you expect to see from markets during a business cycle downturn or “recession”?
You’d probably expect to see about a year (or more) of flat or negative price performance, if we take the S&P 500 as a gauge.
This is what we’ve seen every few years for two decades.
It might not “seem” like markets reflected any major economic downturn recently.
But I think a lot of people have quickly forgotten how violent the short February/March/April sell-off this year actually was.
The overall investing sentiment was absolutely dreadful in April.
We saw a 21% sell-off in the S&P 500 - or in other words, an “official bear market” (-20% or more).
And the S&P 500 was actually flat between April 2024 and April 2025 (not for long - but it still counts).
This period was just punctuated by a short burst of election optimism between September 2024 and January 2025.
Another way to view things is a year-over-year percentage change chart.
The S&P 500 dipped into negative year-over-year performance earlier this year.
For two decades, this is something it has pretty much only done at the end of a cycle (excluding the pandemic).
There’s that “full cycle” shape again between late 2022 and early 2025…
You could also argue that the period between roughly April 2024 and April 2025 was some kind of “bear market” in the crypto world (minus bitcoin).
Here’s Ethereum.
And here’s Solana.
Just a full year of largely flat to down price action in the crypto world.
So what does this mean for markets going forward?
Well, if it’s correct that we’re now back in an early cycle environment - we’re about to witness the most hated risk asset rally in history (and it’s already quite widely hated).
A lot of people just didn’t have enough time to get their “bear fix” in during the short, but sharp, equity downturn earlier this year.
It also means anybody expecting a bitcoin/crypto “four-year cycle” to end in late 2025 will likely be disappointed.
If we have only just recently started a “new cycle”, it could reasonably be expected to peak around late 2026 at the earliest and probably 2027 - based on the length of previous cycles.
Wrapping up
I’ve been wrestling with this theory for months now.
And I’m still not sure what to make of it.
This newsletter isn’t me saying I definitely think this is what is happening.
It’s just an exploration of an idea - following on from Wong’s recent comments.
Wong is now one of a number of people I see coming around to the idea of an “early cycle” environment emerging.
So what do you think? Are we back in an “early cycle” environment?
That’s it for this edition - catch you for the next one!
MILK ROAD MACRO PRO AMA 🎙️
Wanna pick a former BlackRock VP’s brain on the current macro environment?
If you’re a Milk Road Macro PRO or All Access member – you can. Every. Single. Month.
John Gillen is the man in question and he’s kicking off our monthly Macro PRO AMA series on Wednesday the 17th, at 11am EST, on our PRO Discord.
If you’ve taken part in our previous AMAs – you know the drill:
You can submit questions anytime in the lead up to the event, and John will go through them live, sharing his key insights.
Sound good? Great! Here’s what you need to do in order to take part:
- Make sure you’re a Macro PRO or PRO All Access member
- Submit your questions using this form
- Mark your calendar for Sep 17th
See you Wednesday! (You won’t want to miss it!)
BITE-SIZED COOKIES FOR THE ROAD 🍪
Oracle CEO Larry Ellison briefly became the “official world’s richest person”, taking the crown from Elon Musk. Ellison’s wealth hit $393bn after Oracle stock surged more than 40% when the firm announced a rosy outlook due to demand for AI infrastructure.
Goldman Sachs announced that this week is set to be the busiest week for IPOs since 2021. Rallying equity markets and bumper first-day performances from high growth tech-focused stocks have revived investor confidence in new issues.
US PPI (Producer Price Index) came in well below expectations for August at -0.1% month-over-month. The cool inflation data will likely bolster hopes for a Federal Reserve rate cut next week.
RATE TODAY’S EDITION
What'd you think of today's edition?
MILKY MEME 🤣
ROADIE REVIEW OF THE DAY 🥛
