NEW YORK (Real Money) -- Let's face it, someone's going to be wrong about the banks or the bonds. This curious decoupling we are seeing, where rates continue to go down but banks are breaking out, shouldn't be happening. At least history says it shouldn't. You have to be tempted to short these stocks and bet against the Financial Select Sector SPDR ETF (XLF) breakout if rates aren't going higher, because that means there is even more net interest margin compression ahead and that's been the be-all and end-all for these stocks.
So, what does it mean?
First, you could argue that the bonds are giving one last gasp up before a total breakdown. The interest rate sensitive stocks would go along with that. The real estate investment trust exchange-traded fund, the iShares US Real Estate (IYR) , looked like it was on the verge of a rollover most of the day. But I didn't get that read from many of the packaged goods stocks, the so-called bond yield equivalent plays. Some were up and some were down.
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Second, you might want to bet that bank stocks are no longer just hostages of Net Interest Margins and people are now willing to bet on some growth for a change. The bank stocks with loan growth will be able to offset the drag of NIM.
That's possible, but I think unlikely.