And It's not happening.

Last month, retail sales jumped 3%, overshooting estimates of a 1.9% increase. And consumer prices rose 6.4%, while producer prices climbed 6%, with both also topping views.

Retail sales is a perfect example. The consumer is still out there," Victoria Fernandez, chief market strategist at Crossmark Global Investments, said in an interview with CNBC.

The data added to signs that the economy is still running too hot, following the January payroll report that showed a stunning 517,000 new jobs were added.

To be sure, Fed Chairman Jerome Powell has consistently indicated a readiness to keep driving rates up. But the market only now is starting to catch up, after earlier hoping that that the Fed was gearing to cut rates in 2023, not raise them.

"I think it's very clear that that the liquidity in the market, consumer savings, and optimism about the job market continues to support consumption," said Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, in a separate interview on CNBC.

Cooling of demand on the consumer side of the economy, on the services side of the economy, is just not coming through yet."

What to do?

Add fixed-income investments to their portfolios and be tactical in choosing stocks. A diversified portfolio focused on growth and value stocks.

The boom-bust scenario is still there!

The potential for a kind of boom-bust scenario does still exist. "We would not be shocked to see a 15% to 20% pullback from current levels which would take us below the prior cycle."

Even meme stocks are back.

Names like GameStop (up 16% year-to-date), Bed Bath & Beyond (down 28%, but was briefly up more than 120% despite possible imminent bankruptcy), and AMC (up 30% year-to-date) are soaring despite big risks and little sign of a turnaround of these businesses.

We think that the risk-reward of holding bonds at this level of short-term yields looks better than equity at any time since the great financial crisis.

What could ultimately break this "fragile" tape?

Fed's reaction to the incoming data and speculative investment behavior. On Thursday, Fed President James Bullard supported the idea of hiking interest rates by 50 basis points at its next meeting, rather than the 25 basis points the market expects. Stocks immediately sold-off following Bullard's comments.

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