While working, this iguana popped out of the Bougainvillea to say hi.

Enjoying the midday sun, the iguana got me thinking.

How is it that this market, facing all kinds of obstacles each and every day, manages to climb up and enjoy its version of the midday sun?

As the creator and proponent of my economic Modern Familiy characters, my answer is not to question, but to follow their lead.

The Russell 2000 (IWM), probably as old as the lizard, confirmed the bullish phase today, in spite of the pressure from the S&P 500 and the Dow.

Regional Banks (KRE), or the Prodigal Son, was given license to perpeturate the lavish lifestyle bankers enjoy, once regulations were rolled back.

Big Brother Biotechnology (IBB), often in competition with his brother KRE, also confirmed its bullish phase.

Yet, none of them would be anything without their fearless sister-Semiconductors (SMH).

She, and her trip to new highs, gave IBB, IWM and KRE, the courage to face the chaos in the White House and the impending tariffs, head on.

Surprised yes. Will it last and for how long, great question, right?

The macro picture I focus on everyday-interest rates and the US dollar, never strays far from my consciousness.

Today, rates firmed and the dollar weakened.

Now, the rollover into small caps given that tariffs will impact imported rather than American goods, makes sense.

Nevertheless, should the rates continue to climb, as appears inevitable, and the dollar continue to fall, less inevitable but highly probable, can the market continue to hold up?

For now, inflation is under control and the economy is robust.

Yet, the more rates rise, the more likely money, that has been invested with little risk, could begin to move into savings, a safer bet if one can actually collect interest after all these years of negative returns.

Then, if the dollar falls further in value, that shift in psychology might entice investors into saving money even more, since that money will buy less.