'Escape velocity' has never really been reached to the upside. Yes S&P is at or near record levels, as breadth has improved. However, even mega-caps at the helm of S&P leadership are softer this month generally, and small-caps have had bouts of strength, but mostly nothing significant or sustainable.

Yes, money has come back into 'the' market, but enthusiasm exceeds results at times. Investors 'want' the market to march forward, and it may succeed in the very short-term, but this particular S&P phase is long-in-the-tooth, and for that matter momentum is sort of stagnant. So will that persist in 2nd Quarter?

It's tricky to assess the 'path' to rate cuts, but like I have contended all year, the bears are not correct, and the pace of inflation is strictly as a slower rate, there really isn't price decline in overtly evident ways.

Short-term yields coming down as Funds-rate-cutting approaches is normal, it tells one of a more bullish (not great) bond market and eases defensive or yield-biased stocks a bit, and should promote disruptive smaller stocks more, albeit it's not easy and the focus on AI sort of confuses aggressive money. It's not inappropriate to hone-in on that area, but the bigger stocks have risen for a long time now, and the smaller ones are prone to the whims of speculators.

It is of course essential to have price levels not advance significantly to such an extent that the Fed is compelled to moderate it's anticipating 'easing', with the understanding that (as contended all year) there is no deflation trend. It's also possibly that certAIn big stocks like Apple will find new footing, not from sales in China (destined to stay off for now) but from moving into AI and get a grip on analyst narratives regarding Apple, rather than just the DoJ opponent. (And while I too bemoan the 'Apple tax' at time, I ponder DoJ motivations.)

Market X-ray: 

There's not much excitement here, nor should there be. Hence, I described S&P as 'holding together' ahead of Quarter's End, and that's what it is doing in these few days ahead of a long (Easter weekend) hiatus. 

Probably you don't get an end to a 'bull market' here, in this way, however a correction is looming. The only way to absorb that and hold these high levels for the S&P relates to 'back-filling' (or uplifting) others beyond the mega-caps.

I certainly understand the views of the uber-optimists too...as far as a strong economy and decent earnings for bigger companies, which offsets pressures for low interest rates, to some extent.

So multiples matter, and rates matter, and a lot of it is pending. And this still is a bifurcated market, which I've found frustrating for a long time, but that's it that we have to deal with. You can't compel money managers to reallocate to smaller stocks, and in a sense I understand why they keep buying expensive stocks even as they wobble at high levels, because they're supporting what is already in their portfolios I suppose. Ultimately that won't prevent correction.

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