Market Signals:  Markets vs system reality

Nick Schoenmaker  |  Portfolio Construction Forum  |  18 April 2026  |  0.25 CE

Markets appear calmer. Equity indices have stabilised. Volatility has compressed back toward pre-conflict levels. The narrative is shifting from disruption toward normalisation.

But what markets are pricing looks like convergence while the underlying system is showing fragmentation. The distinction matters - because markets can remain stable at the index level even as risk becomes more uneven, more concentrated, and more difficult to hedge.

This week’s signals suggest that is now the dominant dynamic.

Bottom line

Markets are not misreading the environment....

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