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TWO SCARCITIES ARE RUNNING THE WHOLE MARKET ⚡️💻

Two scarcities are running global markets right now:

Energy and compute.

One is causing the biggest oil supply shock in history. The other has pushed Nvidia past $5T, and semiconductor stocks to levels that have never been hit before.

Almost nobody is connecting them. But they're part of the same story.

Let’s start with the energy side.

The Strait of Hormuz is still closed. Pre-war, 20M barrels a day moved through the chokepoint (about 20% of global oil demand). Today the flow is close to zero.

The daily shortfall sits between 6 and 11.4M bpd (barrels per day) depending on the estimate.

That gap is bigger than the daily oil consumption of the UK, France, Germany, Spain, and Italy combined.

Brent crude oil is bouncing between $105-110 right now. 

Every time Trump posts something hopeful about a ceasefire, prices dip. Every time the resolution doesn't follow, they spike right back.

The problem is - this isn't getting fixed when a ceasefire gets signed. 

The French government estimates 30-40% of Gulf refining capacity has been destroyed, and full repairs could take up to three years.

The global annual oil bill was $2-3T before the conflict. It's now moving toward $5-8T.

That extra $3-5T has to come out of consumer spending somewhere else.

And while energy is breaking, semis are on a vertical run:

Here's where the two stories fuse into one…

TWO SCARCITIES ARE RUNNING THE WHOLE MARKET (P2) ⚡️💻

Six companies account for ~70% of the entire S&P 500's earnings upgrades for 2026.

Every one of those six sells into either compute or energy. 

As for the rest of the market? More stocks are getting earnings revised down than they are up.

The few winners are winning big, while everyone else is feeling the pressure (even if the indices look fine).

Then we have the Kevin Warsh wildcard.

The new Fed Chair just walked through Senate confirmation pitching a "Back to Basics" Fed: 

Kill inflation. Keep people employed. That’s it, nothing else.

His most interesting viewpoint? He thinks AI is deflationary and should factor into Fed policy. 

That gives him political cover to cut rates even with U.S. inflation sitting at a two-year high of 3.3%.

He also wants to shrink the Fed's balance sheet and let commercial banks take over more debt issuance, which pushes greater liquidity into the system, not less.

Which brings us to the potential Bitcoin setup...

The ISM Manufacturing PMI, a key gauge of U.S. manufacturing activity, pushed (and stayed) above the level 50 this year - indicating that U.S. economic growth had flipped from ‘contraction’ to ‘expansion’:

A forecast of high liquidity, ISM above 50, and low rates relative to where the economy is actually running?

Historically that's the exact mix where Bitcoin and crypto outperform.

And sure - BTC is still in a downtrend, with the market is positioned for new lows. But the bullish tailwinds are stacking, a short squeeze is on the table, and the CLARITY Act could land as a catalyst in May or June.

The takeaway:

We’re in a reflationary regime - where two scarcities are deciding which companies thrive and which get left behind.

The setup for risk assets (inc. crypto) is coming into view.

The hard part is positioning - because the market can look fine while six stocks do all the work and you sit on the wrong side of the trade.

If you want to learn more, we just put out a full Milk Road Macro PRO report breaking all this down further.

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