The dichotomy between what is working and what isn't has grown gigantically near the end of what turned out to be a pretty darned good month.
If it is being acquired or doing the acquiring, it goes higher. If it takes out capacity in its industry, then all the companies in the sector also go higher.
If it is selling goods internationally or if it depends on a stronger consumer, it is going lower -- unless it is heavily shorted, think Shake Shack (SHAK) and GameStop (GME).
It's hard not to be giddy if you own a consolidator or the consolidated. You think we are in a rip-roaring bull market if you own Avago (AVGO) or NXP Semiconductors (NXPI) or Altera (ALTR) or Intel (INTC). You can't believe how strong this market is if you are in a health care cost container, especially if it is Humana (HUM).
On the other hand, if you are just sitting on a plain old industrial, you are thinking, "When did this good market just morph into a bad one?"
You know I have been a big fan of the consolidation theme and have repeatedly urged you to own one of the four horsemen of the semis: Qorvo (QRVO), Avago, NXPI or Skyworks (SWKS). They are all insanely strong. I pushed you to own the HMOs for two weeks, betting that five goes down to three, with Humana the most likely to be acquired from among Anthem (ANTM), Cigna (CI), Aetna (AET), United Health (UNH) and HUM.
How about the rest of the market, though? That's become hostage to either international events or purchasing power, with the former a source of endless disappointment and the latter turning distinctly negative in May.
I don't like this gulf between the haves and the have nots. We need good news out of Greece, something positive from China and the Fed's people to stop talking entirely and signal that there is no inevitability to a rate increase given the newfound weaker data.
Sure, deals are great ... if you own the stocks involved. If you don't, you are thinking, particularly if you own an old-line industrial or a transport, "If this is what I am staying in for, let me out of here!"