Worrisome 'rotation' persists while big-tech dominates illusions of strength while most smaller stocks are previously-crashed zombies of their businesses even 'if' their probability of survival, solvency and eventual prosperity remain.

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That's a tough scenario, but it's not historically unprecedented. Bifurcation of this type has dominated by about a year and a half, as rationalizations galore (such as tech being 'even more' expensive before the slippage) dominate. It's not impossible that a further shakeout occurs, but with so many anticipating it now, the great 'offsides' trade would be suspecting higher levels this Spring.

The base-case is that cyclical earnings won't be as horrible as bears suggest, with onshoring and infrastructure spending not only sustaining 'some' earning capacity, but also frustrate the angina the Fed must feel trying to manage this.

Yes, the Banks are have a post-myocardial-infarction period of rest, but they'd mostly survived (all the major banks 'seem' fine), and that's powerful itself. As many of these entities, which are powerful forces in our society, make it, we'll get more pressure on real estate (tighter lending standards), but rate slippage over time, and in fact that has already 'slightly' started in some lending areas.

Most analysts talk about having a 'correction', last year was a rate-drive drop. The idea of a whole market drawing-down is problematic, as most already has been crushed, and the 'credit crunch' for consumers is also already underway.

Some will see this as 'opportunity', which is why Apple (and presumably with Goldman Sachs) initiated their version of American Express Plan-It, a new 'buy now' pay later (spread over 4 interest free payments) plan. Opportunistic, as consumers (or even small businesses) like such ability to spread-out costs, such as for equipment or inventory purchases, and though the limit restricts it a bit, it's solid marketing to endear customers to use Apple Pay/Wallet more. I believe we're going to see rates decline, and the Fed pivot later this year.

In-sum: 

Essentially boring if slightly tense session, but a solid 5-year Auction in-contrast to the 2-year yesterday. Basically yields almost the same: a rarely seen status, but also affirms that peak rates are behind not ahead. Of course I don't mean 'Fed Funds' rate, but that may turn-out to be the case soon too.

There's no argument about the poor visibility for earnings, as far as impact of contracting credit, lower loan growth, reticent consumers and so on. A shallow recession would probably be the worst I can imagine (barring geopolitical or a similar 'black swan' shock), because when (not 'if') the Fed pivots, you'll get a brief 'off to the races' advance likely, and that's going to feel empowering.

A recession wouldn't really solve the problem of inflation generated by other factors, and would be a Fed coming to the alter of admission of commission of a fiscal crime, by rapidly increasing rates, triggering the banking challenge to hedge (bigger bank risk managers were better at it), as they were making up for lost time after previously keeping rates too low for too long. It's Intellectual Buffoonary in a sense, because they overplayed their hands in both ways.

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