Well, howdy there, Internet people, it's Bell again. So today, we're going to talk about the

stock market versus the economy and ignoring signs. So, we got a question that really gets to the root of a big misunderstanding, and it can help explain what the stock market is and isn't a good gauge of.

So here's the question.

So I'm confused about something.

I see a lot of people warning about corrections or even crashes when it comes to the stock

market.

You were the first one to say something, so I'm going to ask you.

This week, it became clear that

interest rate cuts weren't going to happen fast. New tariffs were coming, and inflation is going

up. These are all things that are supposed to be bad for the economy, but the stock market

didn't crash or correct. In fact, it went up. I don't understand.

Okay, so when watching the news, it's often portrayed as if the stock market is a measure of the

actual economy. It isn't. Even when performing on fundamentals in an ideal way, the stock market is a mechanism for investors to buy pieces of a company,

and the expectation is based on future returns,

not the state of the economy right now.

The stock market can be somewhat disconnected from the real economy,

which is best measured by the gross domestic product,

wages, and employment. What you're pointing to is evidence of this. The market is severely

overvalued. Currently, the market is valued around 209% of the GDP. That's a record high and indicates that people are investing based on emotion,

or maybe some are trying to time it and hoping to get what they can and get out before it corrects.

The fact that the market gained, while the news was universally not great, shows that disconnect

is in full swing and emotion is driving a lot of investment.

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