GM. This is Milk Road, the daily newsletter where John pops in every Tuesday to crop dust your inbox with Macro alpha.
Here’s what we’ve got for you today:
- ✍️ The bulls are relentless.
- ✍️ In this economy!?
- 🎙️ The Milk Road Show: The Market Got This Bitcoin Trade Completely Wrong w/ Ben Werkman.
- 🍪 Ethereum is a trillion-dollar asset, trading at $100B.
Bitget Stock 2.0 is a complete rethink of how tokenized U.S. equities should work. Check out Bitget Stock 2.0 and start trading tokenized equities today.
Prices as of 2:00 p.m. ET. Powered by CoinGecko.
THE BULLS ARE RELENTLESS
Remember how the last few weeks we’ve been sort of cautious about macro?
Well, this week we’re going outright bullish.
The headline allocation posture crossed into LONG this week, rising from +0.12 to +0.30, and it did so in the scenario last week's brief flagged as the one most likely to prevent it.
I know, right? Cray. Let me explain.
May PCE came in at 4.1% headline and 3.4% core. The hottest inflation reading in three years and above the Fed's own freshly raised forecast.
This should have been scary beary news that sent the bulls into retreat. Instead, the market absorbed the news without a volatility event. Breadth surged to +1.95, VIX fell to 17.65, and market momentum reached +0.66.
Absolute chad bull market. Honey badger bulls do not give a fund.
The wide participation is specifically what carried the posture above the +0.25 threshold for full exposure. When equities rally broadly rather than narrowly, the breadth reading builds enough cushion for market momentum to stay elevated even as financial conditions weaken.
Basically, the bull run is so broad and strong that the market shrugged off the hot print and just kept chugging.
Okay, that’s the market side, but what’s going on with the economy?
Keep reading fam. I gotchu.
TOKENIZED STOCKS JUST GOT AN UPGRADE
Onchain stocks have always had the same three problems:
- Terrible liquidity
- No dividend tracking
- Dead capital
Bitget Stock 2.0 fixes all of that. It's a complete rethink of how tokenized U.S. equities should work:
- 0.04% trading fees
- Near-zero slippage
- Real-time dividend distributions
- Stocks that can actually be used across DeFi
- Sourced directly from Nasdaq and NYSE
The gap between TradFi and DeFi is getting smaller.
Check out Bitget Stock 2.0 and start trading tokenized equities today.
Please support our sponsors who make this free newsletter possible.
IN THIS ECONOMY!?
The economy pillar is more reserved, but not bad.
Stress ticked to +1.97 and the macro buffer held flat at +0.40. At the same time, GDPNow slowed to 2.5% annualized for the second quarter as real spending missed.
Below-trend growth alongside above-target inflation is the combination that limits how far the macro buffer can recover, and a recovering macro buffer is what would make the current LONG call more durable.
I gotta be honest with you all, I don’t think we’ve fully digested the impact of the inflation shock yet. The thing we’re focused on is core CPI, not PCE, and core CPI held at 2.90% this week, leaving the reading flat at +0.30.
Core PCE running at 3.4% means the stress score will face additional upside pressure if CPI starts to follow. This will result in some erosion of the macro buffer and squeezing the posture back toward CAUTION.
I know, super lame. But things are definitely tilting in favor of the bulls.
Wrapping up
The two developments that matter most from here are breadth and the CPI.
If we begin to see weakness spreading to the sectors that drove breadth's surge, it could be a sign that the market is losing confidence and it’s time to run for cover.
If the July 14th CPI release comes in above 2.90%, I am going to be a very sad macro analyst.
I do want to point out that it’s wise to watch both of these indicators together. Not just each of them by themselves. Individually, they are just going to pose a stress test. However, if they move together, bullish or bearish, they could really tip the direction of the market for the rest of July.
If you want to see how the Milk Road PRO analysts are tipping their portfolios for July, you can sign up for Milk Road PRO today and see all of our portfolios.
There have been over twenty trades in the last week alone. Even I bought something. Join Milk Road PRO today and come along for the ride!
Okay, that’s it for me this week. Until next time, stay safe, stay educated, and stay bullish!
THIS WEEK: ANALYST PAYDAY 🎙️
ICYMI: On the Monday before the first Wednesday of every month, each of our analysts gets $500 dropped into their portfolio. What they do with it is up to them; some will put it to work right away, others may sit in cash until markets feel friendlier. Either way, they have to explain their thinking.
It's the same thing a lot of you are already doing, taking a slice of your paycheck and putting it to work. The difference is you get to watch exactly how the analysts think about it, in real time. We cover all of it in a report and a live AMA on the first Wednesday of every month.
Next up on the schedule:
- 📆 Jul 1 at 10:00 a.m. ET.
We go live tomorrow with John, Melvin and Martin 🫡 Come ask them anything and get their take on what's next. Submit your questions using this form.
BITE-SIZED COOKIES FOR THE ROAD 🍪
Pre-internet money rails meet the agentic economy? Yikes. Arc is Circle’s open Layer-1 built for the internet-native economy. Humans and AI welcome.*
Lyn Alden: Bitcoin in the $60K range is cheap on a 5-year view (even if I can't call the next 3-6 months).
That said… Bitcoin at $60K is a make-or-break moment ($45k vs $85k is essentially a coin flip), according to Mike Novogratz.
John Gillen: Ethereum is a trillion-dollar asset, trading at $100B.
DeFi Saver turns Aave v4 into a trading bot for your loans: Stop losses, take profits, and one-click loan migration - we broke down the pros, cons, and fees so you don't have to.
*this is sponsored content.
Check out Bitget Stock 2.0 and start trading tokenized equities today.
MILKY MEMES 🤣
ROADIE REVIEW OF THE DAY 🥛
VITALIK PIC OF THE DAY
