The markets are sending conflicting signals, says columnist Andrea Cunnen.
Frankfurt Wednesday was once again a trading day as it should be. Investors were in a mood known in technical jargon as risk-on. Fears of a escalating banking crisis receded further into the background.
As a result, riskier asset classes that were more dependent on economic developments, such as stocks and oil, were in demand. Bonds, on the other hand, considered safe havens in troubled times, were sold. But looking back at the past few weeks and months shows that the situation is complicated and that the various markets are sending conflicting signals.
If you only analyze the stock exchanges, you would have to come to the conclusion that the prospects for the economy are pretty good. Despite the setbacks, for which the bankruptcy of the Silicon Valley Bank and the emergency takeover of Credit Suisse are primarily responsible, the major indices have still been well up since the beginning of the year.
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