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[WSHazel]

22. I am rooting for the stock market to behave rationally

I have spent my career in corporate finance and I can’t describe the chaos and blatant manipulation in an intelligent way to my clients. The S&P should be under 5000 given the regulatory uncertainty, and along the same lines, the Euro should be at $1.20/Euro or so, and the Yen should be higher, maybe 125 or 130/dollar. 10 year yield should be closer to 5%. All those targets are based on standard economic theory going back decades and macroeconomic capital flows that are already happening. I am not alone in thinking this.

So why is none of that happening with equities, fixed income, or currencies? I am open to the rules of economics changing, but I need someone to explain the new rules. No one can beyond “MAGA” has created a new reality, or at least convinced a big part of the market there is a new, very alternate, reality.

Two guests on Bloomberg this morning expressed similar sentiments to mine in terms of where the market should be, including one picking that Euro target, and the second guest said that he can’t explain the supply/demand dynamics for Treasuries. Neither can I, but I don’t know spit about bond markets and only follow Treasuries at all because they are occasionally a benchmark for debt. The guy on Bloomberg was a senior fixed income trader at SocGen and he couldn’t explain it.

So my question is: what the fudge is happening?