AI has been known to hallucinate. So have financial markets

Andrew Sheng is a former central banker and financial regulator, currently distinguished fellow at the Asia Global Institute, University of Hong Kong.We’ve never had it so good. The S&P 500 and Nikkei 225 have hit record highs this month. SpaceX had its spectacular initial public offering, the largest in history. The company raised an eye-popping US$75 billion and saw a sharp rise in its share price to a mind-blowing valuation of US$2.5 trillion in two days. The US-Iran deal on reopening the Strait of Hormuz caused petrol prices to drop back to below US$4 per gallon.Global stock markets are creating seemingly unstoppable wealth for investors. Last month, bull investor Ed Yardeni raised his year-end S&P 500 Index target from 7,700 to 8,250. US companies are still recording bumper profits, driven by Artificial Intelligence (AI), financial and consumer giants.Let’s connect some dots in the boom or bust noise that could cast doubt on market enthusiasm.