Today saw extreme bullishness in US equity markets following Fed Chair Powell’s remarks, but despite the “do whatever it takes” sentiment he projected, there are still good reasons for investors to proceed with caution, Ed Harrison said during today’s Real Vision Daily Briefing.

He cited the fact that PNC sold its Blackrock stake as proof that there’s trouble ahead. It made the sale to ensure they would have enough capital to withstand what is to come. That fear for the US economy is not a bullish message and was completely overlooked in today’s business, Harrison said.

On a more positive note, the cooperation between France and Germany could create an entirely different dynamic in the Eurozone.

“The questions we have to ask ourselves as investors are A) is this for real B) what’s going to happen to asset markets as a result?” Harrison said.

The spread between bunds and US treasuries, which is already getting squeezed, will narrow even more if this is real, Harrison said, and he thinks we’ll eventually see a convergence of bunds and treasuries as a result. 

The $500 billion dollar relief package is a promising start, but banks in Europe are still showing signs of stress. Euro banks are trading at their lowest levels on price to book, which tells you that people don’t believe their book value will stay at the current levels because they’ll be taking lots of credit write downs. 

“That’s not a bullish message,” Harrison said.