While market confidence has mostly returned following change at the top of the UK government, providing a boost to equities, what is not clear is whether all the correct elements are in place for a sustained market rally, according to Uzo Ekwue, UK small and mid-cap analyst at Schroders.
One of the factors that will help in this, she says, is a more sustained improvement in consumer confidence.
Ekwue says: "When you look through some of the euphoria, you see some of the rally has been a function of hedge funds reversing their short positions.
"The US inflation [projections] has been better than expected. But it is important to understand that is just one print.
"What we need to ensure is inflation comes down much more sustainably and is better than expected."
Ekwue goes on to add: "We need to see a more sustained improvement in consumer confidence. We need stronger signals from central banks globally that we are pivoting away from an interest rate hiking cycle and more towards one of lower interest rates. Until then we are not trying to call the bottom."
Additionally, while restrictions are being eased in China, it will be a slow process.
Speaking to David Thorpe, special projects editor at FTAdviser, Ekwue discussed the outlook for UK equities, the impact of further rate hikes and how to achieve diversification in an equity portfolio.
The video is worth 30 minutes of CPD.