GM. This is Milk Road, the daily crypto newsletter that once a week transforms into a macro newsletter written by John to bless your inbox with the big picture.
Here’s what we’ve got for you today:
- ✍️ No change is a change?
- ✍️ Energy prices rise ‘oil’ over again.
- 🎙️ The Milk Road Show: Will the Clarity Act Kick Off Crypto’s Biggest Bull Run Yet?
- 🍪 The biggest threat to retail investors isn't volatility or leverage...
Europe's biggest blockchain conference, European Blockchain Convention, is back in Barcelona on September 16-17. Milk Road readers get 15% off tickets with code “MILKRO_15”.
Prices as of 2:00 p.m. ET. Powered by CoinGecko.
NO CHANGE IS A CHANGE?
The headline allocation posture of the Milk Road Macro Index sits at -0.16.
This puts us squarely in CAUTION territory and is pretty near to being a flatline reading from last week’s macro newsletter.
So, am I telling you that nothing much has changed in a whole week?
Kinda, but let’s break it down a bit more than that so I sound smart.
Our Milk Road Macro Index has two pillars, one for the market, and one for the economy. The market and economy pillars are pulling in offsetting directions rather than either breaking the stalemate.
Have you ever seen a tug-of-war that just goes nowhere? Well, you have now.
The previous week's brief's two open questions both got partial answers that only further compounded the ambiguity rather than resolving it.
June durable goods orders rose just 0.3% against a 1.6% consensus, nudging GDPNow's Q2 estimate down to 1.6% and moving in the wrong direction ahead of Wednesday's Bureau of Economic Analysis advance GDP release.
At the same time, initial jobless claims fell to 187,000, the lowest since 1969, keeping the macro buffer at +0.48 and signaling that the labor market is NOT collapsing.
Okay, so those economic forces more or less offset. GDP dipped while labor showed strength.
But the market pillar has gotta be driven by something other than the Iran conflict this time, right?
RIGHT!?
*breaks down crying *
EUROPE’S BIGGEST BLOCKCHAIN CONFERENCE IS BACK
Cross-border deals that normally take months of travel happen here in two days.
The European Blockchain Convention returns to Barcelona on September 16-17.
This is Europe's first major institutional gathering since MiCA came fully into force.
Why you should consider going:
- 5,000+ attendees from 90+ countries
- 300+ speakers including J.P. Morgan, Coinbase, Fidelity and Invesco
- 80 of Europe's top 100 banks expected on the floor
The institutions, capital, builders, and infrastructure providers you need to know will all be together in the same place. Don’t miss out.
Milk Road readers get 15% off with code MILKRO_15.
ENERGY PRICES RISE ‘OIL’ OVER AGAIN
The market side remains pinned by the oil shock.
Yes, I know we’re all sick of the oil crisis and want the Iran conflict to be over, but what do you want from me? I’m just an email.
However, I can tell you that the U.S.-Iran talks have moved from an open shooting war to active negotiation over Hormuz vessel transit terms. This is a positive diplomatic shift. We’ll see how long it lasts. But this recent change has not yet been fully priced in even though oil is a bit down from its most recent surge.
Growth impulses fell further to -0.50, though the week's pace of decline has slowed sharply from last week's. Which is kinda good. Sorta. If you squint. Maybe less bad is a better way to describe it than good? But it's good adjacent!
The elevated risk for the market right now is that Microsoft and Meta earnings are coming this week, and they could be a sort of double-barreled blast if things go sour.
A CapEx-heavy miss that fails to show AI spending converting to real revenue would not only erode breadth, but could simultaneously pressure credit markets and drag financial conditions down. This would be a strong negative hit to market momentum from two directions at once.
I’m not saying for sure this is going to happen, but I am saying that the market is going to be watching this very closely.
Bottom line:
The Milk Road Macro Index is holding at CAUTION because nothing has broken in either direction.
Stress is in the calm zone at +0.5, the macro buffer is near-full, and credit spreads are comfy.
The path to the index tilting back to RISK ON requires earnings to deliver on revenue and Wednesday's GDP to print closer to 2.1% than to GDPNow's 1.6%.
The scenario that raises a real threat of a move toward RISK OFF remains the same double-hit. A drop in GDP followed by a hot July CPI on August 12th as tariff goods begin flowing through to consumers.
And, finally, in closing, the Fed has an FOMC meeting TOMORROW. The market is expecting them to hold rates unchanged.
HOWEVER, if Kevin Warsh, Trump’s hand-picked “Rate Cuts King” and Chairman of the Federal Reserve, comes out and announces an interest rate increase tomorrow, well, let’s just say, gulp.
This is a great time to remind you that our PRO analysts are making moves and buying dips throughout all of this volatility. If you want to see what they’re bagging, hop into Milk Road PRO. You get to see all their research as well as trade alerts and access to Discord. Best of all, it’s just a buck! Which ain’t bad even in THIS economy.
Alright friends, that’ll do it for me this week. Until next time, stay safe, stay educated, and stay bullish!
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Raoul Pal: Only two asset classes actually beat debasement over time. Technology and crypto.
Vlad Tenev: The biggest threat to retail investors isn't volatility or leverage... It's missing out before the IPO.
Lyn Alden: Software stocks have gone from growth stocks to value stocks - and the market can't decide if they're value traps. People can now vibe code competitors.
Get 15% off with code “MILKRO_15.” The European Blockchain Convention is back in Barcelona on September 16-17.**
**this is partner content.
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