GM. This is Milk Road, the newsletter where once a week John jumps into your inbox to break down what’s goin’ down in the wide world of macro.
Here’s what we’ve got for you today:
- ✍️ Core CPI print shows cooling inflation.
- ✍️ Market momentum is slowing.
- 🎙️ The Milk Road Show: Bitcoin Is Flashing the Biggest Buy Signal Since 2022.
- 🍪 We're still early in this cycle.
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CORE CPI PRINT SHOWS COOLING INFLATION
If you remember in last week's update, I flagged two things to watch for the week ahead.
Core CPI and major banks reporting earnings on the same day.
Well, the day has come frens and frenemies.
The results are in, and things look pretty good! The six-month core inflation trend held flat at +0.30, avoiding the worst case where growth weakness and re-accelerating prices arrived simultaneously.
That partial relief nudged the stress score to +3.13 from +3.39, and the macro buffer to +0.34 from +0.33, but neither shift was large enough to prevent the headline allocation posture from sliding further to +0.18 from +0.25.
This means our Milk Road Macro Index is moving deeper into CAUTION at 75% exposure.
At this point, you’re probably asking, “John, how did you get so cool and awesome?”
Either that or, “John, if the CPI inflation data was cooler than expected, and the banks did well on earnings, then why is the Milk Road Macro Index getting MORE cautious?”
These are both great questions, but I will answer the second one because the first one is too big for one newsletter.
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MARKET MOMENTUM IS SLOWING
It’s because market momentum declined more than the economy improved.
Breadth fell for a third straight week to +0.98 (seven-day change -0.56) and financial conditions dipped to +0.59 as the VIX climbed to 17.16, pulling market momentum down to +0.59 from +0.67.
The one signal cutting across both pillars constructively was growth impulses turning positive for the first time all quarter, rising to +0.19 from -0.33
I’m not going to dive into what this next bit of data means exactly because it’s a complicated macro thing, but the big driver here I’m seeing is the Baltic Dry Index surged roughly 8%, and the yield curve's quite steepening to 35 basis points since the June payrolls miss began registering in the growth signal.
Basically, this just means that economic growth seems to be happening. A development the economy is confirming in its own thin way, with the real economy score improving to -0.79 from -0.87, GDPNow steadying at 1.3% annualized, and initial claims printing a clean 215,000.
As you can see, there are some economic concerns, but the jobs market isn’t collapsing, inflation is high but trending down, and there are signs of growth coming back.
So, it’s a bit thin, but positive.
What you actually need to know is that the net picture is that the market and the economy are trending the same direction but at different speeds.
The economy is stabilizing slowly, the market losing breadth support faster than the macro buffer can rebuild.
Getting back above the RISK ON threshold at +0.25 on our Milk Road Macro Index could still happen.
The advance Q2 GDP print on July 30 could give us a signal. A reading above 1.5% validates the growth impulse. If continuing jobless claims also start stabilizing or falling, that would let both the economy and the market rise together. Very bullish.
If instead claims drift higher while breadth extends its slide, or inflation spikes again, or growth drops and market momentum weakens further, the framework's cushion narrows further and the posture moves toward the lower half of CAUTION.
The only way to know is to monitor the situation, and I’m going to be here to help with that.
Tying this back to crypto, Bitcoin is showing more and more signs of bottoming.
If you want to see how I’m positioning for the next bull market in Bitcoin and crypto, come join us in Milk Road PRO where you can see my portfolio and ask me all the macro questions you want.
See you there, but in the meantime, stay safe, stay educated, and stay bullish!
BITE-SIZED COOKIES FOR THE ROAD 🍪
Best crypto loan platforms in 2026. Milk Road pick: Ledn.*
Tom Lee: AI stocks up... Software up... War happening... All three should have been rocket fuel for crypto - and yet crypto crashed anyway.
Multicoin Capital: You can't pick the exact bottom. But you can feel it. "When I feel really dumb, I know I should probably buy."
Raoul Pal: We're still early in this cycle - just look at the historical comparisons...
Which crypto exchanges publish proof of reserves? Bitget has been reporting monthly since December 2022.**
*this is sponsored content. **this is partner content.
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