The stock market coasts toward the halfway point with the S&P 500 returning nearly 14%

Stock investors are coasting toward the halfway point of the year feeling a mixture of contentment and confusion.

Content because the S&P 500 has returned nearly 14% including dividends, after nudging slightly higher last week to a new record, already reaching the threshold of the average Wall Street strategist’s year-end target. 

The cost for this 34% annualized gain in less than six months? Merely a few brief 3-6% dips and perhaps the occasional moment of consternation over some viral “meme-stock” pump jobs occurring around the edges of the market.

The confusion is mostly about narrative dissonance, causing the popular playbook in wide use early this year to quit working as well.

Exiting the first quarter the prevailing storyline was about rising bond yields, economic acceleration, swelling inflation and the cyclical and value stocks that had lagged for years, but were seen as the ideal vehicle to ride trillions in fiscal stimulus and pent-up demand. Strongest relative inflows of retail cash was into basic materials funds; heaviest outflows from tech.

It was such a popular story the market couldn’t allow it to come true right away, it seems.