Since Election Day, there has been lots of chatter about “animal spirits.”

The evidence of animated animal spirits has come mostly in the form of “soft data” based on surveys of consumers and businesses that showed remarkable jumps in confidence following the election.

So far, the euphoria hasn’t trickled down to the U.S. economy’s hard data, as most recently evidenced by May’s weaker-than-expected employment report released last Friday. May’s Consumer Optimism Index, which averages the Consumer Sentiment Index and Consumer Confidence Index, remained near its recent cyclical high during March (Fig. 1). So did April’s Small Business Optimism Index (Fig. 2).

Yet the Citigroup Economic Surprise Index (CESI) dropped to -44.7 yesterday (Fig. 3). That’s down sharply from a recent peak of 57.9 on March 15, and the lowest reading since February 18, 2016. That has helped to bring the US Treasury 10-year bond yield down from a recent high of 2.42% on May 9 to 2.18% yesterday (Fig. 4). The 13-week change in this yield tends to be highly correlated with the CESI (Fig. 5). The Treasury yield curve spread has narrowed from a recent high of 213bps to 124bps at the end of last week, the lowest since October 3 (Fig. 6).

Yet the S&P 500 continues to chalk up new record highs, rising to 2439.07 on Friday, already putting it comfortably within our yearend target range of 2400-2500! Yesterday, Joe and I chalked this accomplishment up to “Hannibal spirits,” which is the relentless drive to scale the Alps even with a herd of elephants. More specifically, we observed that money is pouring into ETFs at a record pace.

The biggest elephants in the stock market are the five FAANG stocks, which now account for 11.9% of the S&P 500’s market capitalization, up from 5.8% on April 26, 2013. Collectively, over this period, they’ve accounted for $1.6 trillion of the $6.9 trillion increase in the S&P 500! Their collective forward P/E is now 27.1 and 42.8 with and without Apple, respectively. The S&P 500’s forward P/E is 17.7 and 16.9 with and without the FAANGs. These elephants continue to sprint up mountains, leading the market’s bulls, even though the air is getting thinner.

Yesterday, we wrote that money coming out of actively managed equity mutual funds into passive equity ETFs might be more bullish for the largest-cap stocks, like the FAANGs, than for the rest of the market. One of our accounts told us that only makes sense if money is coming out of mutual funds that have underperformed because they’ve underweighted FAANGs. That’s certainly a possibility.

Dr. Ed Yardeni is the President of Yardeni Research, Inc., a provider of independent global investment strategy research.