Ever been so happy it makes you sad? Ever been so distraught it makes you smile? Humanity is complicated, which makes markets tough to read as well.

Stocks are flirting with levels that delineate a depressed market. The mood is gloomy and the risk of recession is real, but are investors pricing in too much bad news?

Central bankers have spent years focussing their efforts on fighting deflation. Now that long-dormant inflation is back, they have to stop it from bedding in while avoiding sending the economy into recession.

US monetary policy is tightening, sending the greenback higher. This should ease US inflation even as it squeezes the costs of living and doing business for foreign markets.

Central banks, squarely behind the curve, are preparing to raise rates swiftly. Inflation should be peaking, yet a European oil embargo is becoming more likely.

People are starting to react to increases in the cost of living, cutting non-essentials and spending less. Central banks are soon to follow suit by increasing interest rates further.

The war in Ukraine has dampened global growth as waves of COVID-19 continue to roll across the world. Meanwhile, politics is back to the fore in Europe and America.

Western central banks are trying to rebalance the scales in bond markets without causing a panic. Meanwhile, COVID-19 and bog-standard politics are still influencing markets in Europe and Asia.

Cost of living fears seem to be peaking in the UK as a raft of important protections end. How will the economy hold up as households and companies tighten their belts?

The 1970s suddenly seem relevant again given soaring oil prices, high inflation and rising interest rates. But we’re not expecting a rerun of 1970s-style spiralling prices, sputtering economic growth and weak equity market returns.