NEW YORK (Real Money) -- China is falling apart; go buy the industrials.
It really is like that right now. That purchasing managers index number out of China last night, 48 down from 48.5, is something we expect out of Europe -- not China. It's downright terrible.
But the industrials keep getting bought.
It is almost as if the identical information from July of last year, when the reading had been this low, is now being interpreted in a totally different manner. Last year the industrials sold off on this number. This time, it looks like will continue to roar.
Now, I know someone can come up with a thesis that explains this. "Jim, there is going to be a big stimulus package." But that was the rumor last July, and it didn't matter back then.
Or, "Jim, the U.S. is carrying things." But if that's the case, is it too much to ask for empirical evidence?
Or, "Jim, don't you see the growth spurt that's occurring around the globe?" To which I can truthfully say: "No."
Instead, this is one of those moments when the market rotation has a life of its own until it is met with cold, hard facts. Right now, even cold, hard facts -- like a missed quarter from Oracle (ORCL) or Caterpillar (CAT) -- mean nothing. The money just keeps flowing out of high-growth and into slow-growth.
And there's no real explanation other than: Fed Chair Janet Yellen said things are better.
A thin reed that has turned the world upside down, and even Chinese weakness can't seem to change the perception.