The bond market probably is right about an economic slowdown.
Gross domestic product for the first quarter came in at a worse-than-expected 2.5 percent, and most economists are bracing for a second quarter that will be closer to 1 percent.
Jobs and manufacturing data have been weakening as well, and the latest import numbers show falling demand among U.S. consumers.
(Read More: Claims at Five-Year Low; Trade Gap Falls, Too)
Equities, though, continue to get a bid as the Federal Reserve pumps $85 billion of liquidity a month into the system through its purchases of Treasurys and mortgage-backed securities.
Confused? Don't feel bad.
So are investors who, instead of fleeing bonds for equities this year as many predicted for the "Great Rotation" trade, have pulled money from cash accounts and pumped money into both fixed income and stocks.
"This is what financial repression is. You don't have a choice," said Quincy Krosby, chief market strategist at Prudential Annuities. "You play with the cards you're dealt. You can't be academic about it or debate that it should be this way or that way."
(Read More: Fed Keeps Pedal to the Metal as Economy Wobbles)
Krosby reasons that the economic-market cross currents are one of the principal factors keeping retail investors out of the market.
While investors have come back to the market some this year—trading volume is down just 1 percent—equity mutual funds lost $7.3 billion last week, the first negative flow in two months.
Krosby said it's all about liquidity, and as long as the Fed keeps creating money, investors will have to stay in the market, albeit with a high level of caution. Fixed income opportunities abound, she said, and can be found in other places than government debt.
"We're not telling clients not to participate," Krosby said. "Just keep your eyes open."