There are a bunch of dichotomies going on in the markets right now that are downright insane. Let me tick them down:
First, you go listen to all of the bank conference calls and all you hear is how much money can be made from higher short-term interest rates coupled with higher long-term rates. They are a one-two punch.
But as we get just that, some inflection in the yield curve, I hear nothing but bemoaning of what will happen if it occurs. How is that possible? Read the damned conference calls, for heaven's sake.
Second dichotomy: at the same time, we have an atmosphere of tremendous optimism on Wall Street coupled with pessimism on Main Street. Half the people voted against Trump in this country and they probably hate him more than ever. They may not hate his economic policies, but they hate everything else about him and do not want to attribute anything good to him, including those policies. The other half, those who voted for him, give him all the credit he deserves.
Wall Street is tinged by the pessimism of the former. Main Street is enthralled by the optimism that Trump inspires. Some of the bigger companies led by internationally inclined business people think that Trump's the third rail and are concerned about even sounding pro-Trump by talking about the new, lower-tax world. Alice in a wonderland of bluster and foul language and social issue Armageddon? Yep.
Third dichotomy: we do not have enough stock being printed, yet the ETFs are voracious buyers of what's left. What's happening now is that stock pickers are coming in on top of that ETF/retirement monster, and the race to buy the shares of the cherished stocks -- the likes of UnitedHealth (UNH) and Boeing (BA) and Caterpillar (CAT) -- is non-stop.
The only stocks that are struggling here of any note are the ones that aren't reducing their share count: FANG -- Action Alerts PLUS holding Facebook (FB) , Trifecta Stocks name Amazon (AMZN) , Netflix (NFLX) and Google parent Alphabet (GOOGL) -- even as the fundamentals are good and my sources indicate there is nothing going on at Justice that is going to stifle the FANGs. Disagree with me? My sources are better than yours; it pays to have people at the DOJ you went to school with who know the same doctrines you know.
Final dichotomy? All anyone wants to talk about is cryptocurrencies, even as they are now costing you a fortune. They have staying power. When something goes down like this and still has adherents, that's not Nasdaq 2000. There is too much proliferation. That will change, though.
In the meantime, stocks have been fabulous, and they are still largely being ignored. If the cryptos really do crash, that speculative money will go somewhere. It isn't going to the sidelines. It will come into stocks, mostly micro and mini-caps. It will be great. But it isn't happening yet.
Four dichotomies that drive the tape. Four that can't be resolved, at least not yet. They are gravitating toward the bulls, not the bears -- but believe me, it is all being done kicking and screaming.