GM. This is Milk Road Macro, the newsletter that knows that as long as everything keeps going up only, forever, everything will be fine.

Here’s what we’ve got for you today:

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RESPECT THE PUMP

The S&P 500 just smashed through 7,000 like it wasn't even there.

The Nasdaq just made a new all-time high.

So did the Russell 2000.

Bank of America says we’ve officially entered a "bubble-like regime." Translation: Investors have stopped worrying about things going wrong and have started betting on how high things can fly.

They call this "right-tail asymmetry," which is a fancy way of saying “FOMO.” The only risk people seem to care about is the risk of missing out on more gains.

Why it matters for your wallet: The Nasdaq-100 just had a 13-day win streak with volatility that's actually higher than the 90s dot-com bubble.

While the "vibe" is bullish, pros are hedging with VIX call spreads just in case the party ends abruptly. If you're riding the wave, keep an eye on semiconductor stocks. They seem to be the epicenter of the froth. Again.

But in the meantime, WHEEE!!

THE 600M BARREL ENERGY SQUEEZE CONTINUES

Yes, 600M barrels.

That’s the latest estimate of lost oil production in 2026 due to the Strait of Hormuz being closed.

And it’s not over yet.

Even with a temporary ceasefire extension, the math is ugly. We’re looking at around a 6M barrel per day deficit in the global oil market. That is the largest supply shock in human history. By far.

The price per barrel: Oil at $100 a barrel is actually "undervalued."

If the blockade doesn't clear in the next 120 days, emergency reserves will begin to run out in some countries. At that point, well, let’s hope we don’t find out what happens at that point.

Watch for higher prices at the pump and in your grocery bill as transport costs stay higher for longer.

EUROPE’S “BLUE BOND” HAIL MARY

Europe is tired of playing second fiddle to the U.S. Treasury market.

Currently, if you want a "safe" asset in Euros, you basically have to buy German Bunds.

The ECB’s Philip Lane just laid out a plan to fix this: Blue Bonds.

He wants to create a common debt asset worth roughly 25% of the Eurozone’s GDP. The goal is to create a benchmark that actually rises in value when the market panics, giving global investors a real place to hide.

Why should (E)U care? If Europe pulls this off, it creates a liquid alternative to the U.S. Dollar.

It means better ways to hedge risk in Euro-denominated portfolios and potentially lower borrowing costs across the entire Eurozone.

It's a massive structural shift that could change how global money flows for decades.

Or you know. Maybe not. But it’s a huge Hail Mary to try to keep capital in the Euro.

Wrapping up

The global economy is living in two different worlds.

In one world, stocks are mooning and AI is fixing everything.

In the other, the world's most important oil lane is blocked and energy prices are soaring.

As usual, we remain bullish. We also remain aware that volatility and uncertainty will continue to be elevated.

Enjoy!

BITE-SIZED COOKIES FOR THE ROAD 🍪

Japan’s Nikkei index hit an all-time record of 59,585, but it’s not all sunshine. Japan also logged its fifth straight year of trade deficits thanks to high oil costs and U.S. tariffs.

U.S. fourth-quarter 2025 GDP growth was revised sharply lower to just 0.5% annualized, mainly due to a 17% plunge in federal government spending, though private domestic demand held up better than initially feared.

Adobe just announced it is extending its stock-buyback program by $25B, a huge move that suggests they believe they still have plenty of room to grow.

What if a bank app and crypto wallet had a baby? You’d get Brighty which is a money app that lets you use crypto and regular fiat money together without transferring funds.*

*this is sponsored content.

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