Can This Disconnect Be Sustained?

Authored by Sven Henrich via NorthmanTrader.com,

Straight Talk

We live through very unique times, not only because of the shock of the coronavirus that recently hit the world unexpectedly, but also because of large complex structural issues that have been building for decades.

A popular mantra says the stock market is not the economy and the economy is not the stock market referring to the often seen disconnect between market prices and events taking place in the economy.

The most recent example has been Wall Street rallying with each disastrous jobs report hitting the news wires. Even this last Friday markets rallied again unperturbed by the latest unemployment report showing the most severe collapse in employment in our recent history.

Depression like figures, yet the Nasdaq is green on the year, the S&P 500 largely off the lows with many again predicting new highs to come.

Why?

Because of unprecedented liquidity flooding markets as a result of monetary intervention making the disconnect between Wall Street and Main Street even wider.

We can pretend the stock market is not the economy, but there is no stock market without an economy yet we are witnessing an unprecedented disconnect between the two that has been building for years.

Can this disconnect be sustained? Are investors too optimistic about the current rally? What are the implications going forward?

These are complex issues everyone is confronted with and there are no easy answers. What an intellectually challenging and energizing time to be alive!

I am grappling with these issues as much as you are, we all are. And for that reason the idea for an ongoing webinar arose, to find a format to discuss these issues in more depth and make the debate more accessible and personal.

Hence I couldn’t be more pleased and honored to have found two people I greatly respect who are extremely well versed in markets and the macro market debate who share my passion for the issues at hand to join me for the debate: Guy Adami and Dan Nathan, both of CNBC Fast Money Fame.

As Guy Adami says all three of us have been trying to tell the truth in different ways for years. And that’s not an easy task for the truth is often unpopular or goes against the grain of a system that benefits from the truth being ignored.

So I invite you to join the three of us in this unscripted Zoom debate of what is hopefully the beginning of us discussing the issues we are all grappling with and we think matter to markets and you.

We hope you like it as much as we enjoyed recording it and please let us know what issues and topics are of interest to you for future episodes:

[youtube https://www.youtube.com/watch?v=hRAk__R30Kg]

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