There’s a disconnect between how everyone feels and how stock markets are moving. Meanwhile, the US debt ceiling looms ever larger.

A King is crowned and most of England went to the polls last week. Coming up is a Bank of England rate hike and an update for American inflation.

Investors are fearful of an earnings recession as reporting season steams ahead. Meanwhile, China’s first-quarter GDP estimate suggests its recovery is proving uneven

Following China’s ‘great reopening’, growth is likely to accelerate this year. But we’re sceptical that it will be as successful as many are currently assuming. We expect the road ahead to be bumpy, the same sawtooth pattern that characterised other post-COVID re-openings. Longer term, this cyclical rebound is likely to give way to structurally slower growth.

Markets are riven over weighty questions about the economic strength of our households and businesses clashing with higher living costs, and all the while lurks the menace of unknown consequences created by a rapidly changed world.

Rathbones’ Edward Smith, co-chief investment officer, and Jing Hu, senior asset allocation analyst, give an update on some of the key themes shaping the investment outlook including the banking sector, the outlook for inflation and interest rates as well as a review of China.

We’ve certainly had a difficult start to the year, but what is the investment outlook as we look forward to sunnier days ahead? Our latest Investment Insights considers some of the key themes – such as expectations versus reality for US company profits and the search for inflation protection. 

Money was easy to come by in the 2010s, for businesses, households and governments. With interest rates now much higher, hard decisions loom.

A year of rapid-fire interest rate hikes by central banks is yet to be fully felt by the wider economy. Rathbones’ co-chief investment officer Ed Smith explains why that makes us cautious.

Stocks and bonds ended the month – and first quarter – nearing the top ends of the trading ranges in place since late last year. But there’s still much uncertainty about the inflation and growth outlook, particularly if energy prices start rising again.

But reality has yet to set in for equity valuations, especially in the US.

Strong gains for Europe’s banks last week were reversed by Friday’s close. With the fear bug spreading, can we be confident it won’t strike again?