In recent articles, I said we are in for a bang-up year for GDP and corporate earnings growth. Investors must agree. The signs are becoming increasingly clear in data on job growth, personal income, and retail sales, among key metrics. Investors were way ahead of the data and drove stocks to new highs. They aren't through.

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The Atlanta Fed is now forecasting an annualized 8.4 percent GDP growth in the first quarter, in good part due to January's surge in personal income and job creation. Now there will be another $1.9 trillion coming into the economy over many months and even years. Stock investors are on board with the growth story, which is why the market is roaring. The less enthusiastic bond crowd is more focused on the outlook for inflation, and with reason. 

The improving outlook is putting upward pressure on interest rates. Fed chief Powell said as much, citing rising commodity prices. With the notable exception of gold, a so-called inflation hedge, all commodities are rising, some by more than a little. Consumers will soon feel the impact.

Rising interest rates are not necessarily a negative for stocks. If they are rising because demands for credit are increasing with a growing economy, that's good. Profits will grow, too. But if rates are rising because Uncle Sam is borrowing trillions upon trillions that would otherwise stay in the private sector and support capital investments and spending, that would be a different story. 

Those in the value camp have taken the lead while growth issues are lagging. Energy and financial companies are the poster children for value investing. Bank of America (BAC) and many banks have doubled. Exxon Mobil (XOM) has doubled. Traditional energy issues have taken the leadership away from renewable energy, which was last year’s winner. Energy SPDR (XLE) is up 37 percent year-to-date while Invesco Solar is down 11 percent. 

Ultimately it's first the anticipation of earnings growth and then the realization that drives the stock market. The anticipation part has pushed stocks higher and higher. The realization part will be evident soon. Earnings this year of $200 for the S&P 500 are anticipated and if realized the price-earnings ratio for the index would be 19, close to average for low-rate environments. I haven't seen hard data on it, but I suspect that the stock market does far better when earnings growth is anticipated than it does when results appear. We will soon find out.