GM, this is Milk Road, the newsletter that’s here to remind you that Sam Altman and Elon Musk are not actually in divorce court, despite the toxic relationship vibes.
Here’s what we’ve got for you today:
- ✍️ The divorce of the century.
- ✍️ Powell is all warshed up.
- 🎙️ The Milk Road Macro Show: Lance Roberts: The Bulls Are Back… But This Setup Looks Dangerous.
- 🍪 70% of 783 advisors expect the S&P 500 up 5%+ by year-end.
Consensus Miami is one of the largest digital asset conferences that’s going all in on crypto and agentic commerce. Grab your passes at 20% off.
Prices as of 10:00 a.m. ET.
THE DIVORCE OF THE CENTURY
No, it’s not another Sam and Elon joke, but we will make more of those in the future.
The latest bomb dropped in the Middle East was an economic one.
The United Arab Emirates (UAE) is officially leaving the OPEC squad.
For decades, OPEC acted like the world’s central bank for oil, but that "unified front" is now officially a thing of the past.
What happened? As the Iran war continues to scramble global supply lines, we’re moving away from free-flowing energy and into a world of "resource nationalism."
With the Strait of Hormuz facing a "prolonged blockade" by the United States, the UAE decided it was time to look out for #1.
Why it matters: $115+ Brent crude oil doesn’t just make summer road trips more expensive. It pours gasoline on inflation across the board. High energy costs bleed into everything from airline tickets to fertilizer, which is already sending wheat prices to multi-year highs.
It’s not time to panic yet, but you can start early if you want to get a head start.
THE ENTIRE INDUSTRY IS HEADING TO MIAMI
Where do you go to hear people talk about crypto, AI, and real capital?
If you want surface-level takes, then it’s probably in my group chat.
But if you want institutions with deep pockets, you’ll have to head to Consensus Miami.
Consensus Miami is one of the largest digital asset conferences that’s going all in on crypto and agentic commerce.
Here are the key details:
- 20,000+ global attendees
- $4T AUM managed by finance giants attending Consensus Miami
- The ultimate intersection of crypto and AI
The best part?
You can get an exclusive 20% discount on passes with code MILKROAD.
POWELL IS ALL WARSHED UP
April 29th was Jerome Powell’s final FOMC meeting as Fed Chair.
The Fed held rates at 3.75%.
The plot twist? Powell seems determined to remain on the Fed’s board of governors to finish out his term, even though he will no longer be the Chair.
Dramaaa.
The market, however, is already looking past him at the new sheriff in town: Kevin Warsh.
Warsh is nearly finished with his Senate confirmation, and he’s making one thing clear: He isn’t anyone’s "sock puppet." He’s planning to launch a "Data Project" to replace the current inflation framework, which could mean the goalposts for rate cuts are about to move.
This could be how he justifies a more “dovish” stance on rate cuts. We’ll see.
Our take: The "hand-holding" era of forward guidance is over. We’re moving to a Fed that might be less chatty and more aggressive. This "policy uncertainty" is why the VIX is creeping up even while the S&P 500 sits near 7,100.
Fun little side note: watch the USD/JPY. This is currently testing a major resistance zone near 160.74, and a breakout there could signal some serious currency chaos.
Nervous investors might want to hide under their balance sheets for a while. Things could get scary.
Wrapping up
If you feel like the ground is shifting under your feet, it’s not just you.
Between the global energy order shattering, a regime change at the Fed, and a massive "vibe check" for Big Tech, there is a lot of noise to filter through.
There are tons of companies reporting earnings this week. Stock prices are swinging all over the place as they do.
Volatility will probably remain higher for longer until, well, who knows?
Enjoy the ride!
BULLS ARE BACK, BUT DANGER LURKS 📉
In today's episode, we sat down with Lance Roberts to talk about why the recent market rebound may be more fragile than it looks, and what investors should actually be doing right now.
Here's what you'll hear:
- Why the rally's narrow leadership in semiconductors and select megacaps signals higher correction risk heading into summer.
- How a Strait of Hormuz disruption and sustained high oil prices could derail consumer spending, earnings, and Fed easing.
- What Kevin Warsh replacing Jerome Powell could mean for inflation measures, balance sheet policy, and rate cut timing.
- Why stock-picking and sector rotation are set to outperform passive indexing in today's bifurcated market.
Don't sleep on this one 👇️
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BITE-SIZED COOKIES FOR THE ROAD 🍪
The White House says funding for TSA and border personnel will "soon run out," right as we head into a busy summer of World Cup games. Over 1,000 TSA officers have already quit since February, expect some airport chaos.
Despite a solid 5% Q1 growth rate, China’s leadership is calling for "targeted and effective" proactive fiscal policy to handle the external shocks of the Middle East war. TBD what that means, but it sounds like they’re starting to worry.
A new survey of 783 advisors shows that 70% expect the S&P 500 to be up 5% or more by year-end. Geopolitics is the #1 worry (43%), but most are using "downside protection" to keep clients from panic-selling.
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