On the face of it, bullishness from institutional investors combined with weakening consumer sentiment and some skittishness from retail investors might seem like a bad combination. This is especially true if you think, as some market observers do, that consumer sentiment is a leading market indicator.

In America’s K-shaped recovery, consumption is driven more than ever by wealthy households. So how the average consumer feels about the economy may be a weaker indicator of the economic trajectory than it once was

It’s not that a recession is suddenly imminent. If that were true, we would be seeing corporate bonds’ yield spreads over safe Treasuries widen. But spreads haven’t budged. This looks, instead, like very high hopes for growth being downgraded to merely middling ones. 

Take out Nvidia, Tesla, Alphabet, Microsoft, Broadcom and Amazon, and the market would be up 4 per cent since early January, rather than down 1 per cent. ... We have been asking for some years now what the market would do if the leadership of Big Tech failed. Now we know what it will do: stop going up.