The Institute for Supply Management (ISM) reported that its services index climbed to 59.1 for October. Any reading above 50 represents economic expansion. Meanwhile, the ISM’s manufacturing index limped to the barn with 50.1. Not only is the percentage teetering on the brink of contraction, but the nine point disparity represents the widest divergence between the two indices in 14 years.

Perma-bulls have dismissed the manufacturing slowdown as little more than noise. Yet weakness in the energy, materials and industrials sectors played a larger-than-life role in the August-September meltdown across the entire stock landscape. Can the same narrow leadership from the technology, health care and consumer discretionary segments push stocks significantly beyond the peak that investors salivated over in May?

Keep in mind that, at this point, three-quarters of S&P 500 companies have reported Q3 results. Trailing 12-months earnings are on target to come in near $93.8 per share. That represents a 7.5% decline from the $106 per share witnessed in 2014.

And the news on earnings may be worse than anyone would like to believe. At the height of the previousbull market (10/02-10/07), as investors were rounding the bases to close out the fourth quarter of 2007, trailing 12-month (TTM) P/Es hit 22.2. Where are we today? 22.5.

Granted, we can choose to blame the poor data on the beleaguered energy sector. However, there are at least two big problems with doing so. First, treating an entire sector of the economy as an outlier because it does not fit an upbeat narrative is no different than wiping out an entire sector because it does not accentuate a negative story. Ex-energy S&P 500 earnings may look “less bad,” though ex-healthcare earnings would unfairly paint a ridiculously ugly landscape.

Second, investors blamed the financial sector for the elevated valuations seen in the S&P 500 circa Q4 2007. We already know what happened to those who dismissed tech in 2000 and financials in 2007. It follows that ignoring the energy sector’s warnings about waning global demand and manufacturer stagnation is foolhardy. Either the global economy improves and sectors rally across the board or, conversely, the over-reliance on “services” via tech/healthcare/consumer will end badly.

At present, investors are enjoying a near-term feel-good associated with worldwide stimulus. There’s no doubt about it – the promise of lower rates alongside increased liquidity still have the power to pump stocks up. The iShares MSCI All-World Index (ACWI) successfully retested August lows in September and has been looking to re-establish a longer-term uptrend by rising above its 200-day trendline.

On the flip side, the hope that Europe, China and Japan will all intervene with monetary policy actions may or may not be enough to offset Federal Reserve tightening in December. Should the Fed choose to raise overnight borrowing costs, albeit modestly, the directional shift is likely to push the dollar higher. The US Dollar Index is already 22.5% higher than it was last July; it is already a major headwind for earnings of U.S. multinationals and is partially responsible for a slew of job cuts.

Even more troubling for stock investors is the 21st century relationship between the S&P 500 and the U.S. Dollar Index. In bull markets, the S&P 500/US Dollar Index price ratio has moved steadily upward. In 1999, about a year prior to the 2000-2002 tech wreck, the ratio flatlined. The S&P 500/USD price ratio then moved sharply lower during the 2000-2002 bear. Similarly, in mid-2007, roughly a year prior to the 2008-2009 financial collapse, the ratio stalled again. The S&P 500/USD price ratio then moved sharply lower during the 2008-2009 financial crisis.

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