Let's see, trying to come to grips with a worst of all possible worlds here and I don't know if that's possible without lower stock prices.
Here's how I see it playing out.
For some reasons that we can't really fathom, other than pure national gloom, April was a weak month in this country for retail and so was May. It seems as if the February rebound took all the sales that could be expected for March and April, as silly as that sounds. And since then, the only real growth in retail came from Amazon (AMZN).
Take Home Depot (HD). It is very clear form the reversal that people didn't look at that strong aggregate comp and say there is strength in the consumer. They, instead, pulled it apart and said there was strength in the consumer coming in and weakness coming out. That was particularly devastating for the psyche of the stock because April is paydirt time for spring work and it wasn't like they told you that May was any better.
Know that Lowe's (LOW) looks good, but I am presuming a Home Depot-like narrative on that call.
Overlay on top of that rising gasoline prices -- suddenly a factor in the aggregate not in the micro -- a debilitating political season filled with second-guessing and worry and malaise, no real growth in wages at all and you get a gloomy picture.
No, a very gloomy picture, because on top of all of that you have Fed heads totally ignoring what all of these retailers are saying and a nasty spill seems ahead, worse than we have had so far, for the consumer and consumer-related stocks.
How is it solved?
The way it is always solved when the consumer is weak, the inflation data hot and the Fed negative: lower stock prices.
Low enough to make it so people will wonder which sector to hide in if the Fed is going to tighten because only those who sincerely want to take a recession should want the Fed to hike in these circumstances.
Because if the Fed hikes into a consumer slowdown then the dollar spikes and you can't even hide in international stocks.
Sorry to be such a downer, but it is hard to see a way out for the moment except the way that you don't want to hear: lower prices that do have an inevitability about them with the wrong Fed minutes, more off-key Fed speak and a decision that would be just plain wrong for stocks, not that anyone except those who own them -- a declining number -- really cares about.
Bulls have one hope: the Fed governors and presidents actually listen to the conference calls and recognize how weak April was and how poorly May has begun.
In this circumstance only the highest-growth, non-dollar related stories will come into play and get bought after the shock down.
I just wish there were more of them. The others? Pricing in recession risk is what we will hear, that and the Icahn/Soros disaster scenarios, oh, and let's throw in sell in May and go away for good measure.