The first few weeks of 2026 have been anything but dull. Over just one weekend, America threatened to slap Canada with 100% tariffs, US Congress started squabbling toward yet another possible shutdown, Japan experienced its own Liz Truss style bond meltdown, China accused one of its own generals of leaking nuclear secrets, and the US dollar continued to weaken.

And yet, in the middle of all this “noise,” the stock market has pretty much sailed through the storm as if it was a perfect sunny day. This does feel a little like the start of last year. First came the tariff tantrums — threats on Mexico and Canada, “Liberation Day” duties on imports, then escalating trade barriers with China. Markets panicked, predictions turned gloomy, and yet… markets rebounded strongly on Artificial Intelligence driven growth.

In the US, Trump is determined to keep markets buoyant with tax refunds worth over $100 billion hitting households, fewer payday deductions, maximum 10% interest rates on credit cards and plans to lower mortgage rates — creating an economy with a tailwind heading into the midterms. US markets do look expensive, however growth is spilling over into many other markets which offer more attractive valuations, such as the UK.

Back to the UK, Our Prime Minister was in hot water again this week, undertaking an unpopular trip to China despite the growing distrust of Beijing at home and once more he has been accused of being politically tone deaf on timing and tone.

Many MPs, including within Labour, and much of the public, appear uneasy about closer ties with a state accused of espionage in the UK, backing Russia in Ukraine, and abusing human rights in Xinjiang and Hong Kong. The trip lands at a “worst possible time” politically, just as Western opinion is hardening against China and Washington is suspicious of Chinese influence in Europe, making Starmer look out of sync with allies and potentially irritating President Trump. Still, everyone seems to irritate Trump.

Starmer is seen as going cap in hand to ask for Chinese investment because UK growth is weak and money is tight, which opponents frame as desperation rather than strength. Critics say the government is giving too much (access, symbolism, the embassy) for too little in return, calling its stance “all give and no take.” We will have to see how this develops. Chinese relations cannot be ignored and economically our relationship is still a fraction of the trade we do with Europe, but getting the balance right will be difficult for the government.

We often say that markets like to climb a wall of worry, and tend to drift sideways when not a lot is going on. There remain risks hiding under the surface: another flare-up in the Middle East could send oil prices higher; inflation remains stubborn; and debt levels across Western economies are starting to creak. The poorer end of the American population isn’t feeling the boom, either. Global investors are nervously eyeing the soaring prices of gold and silver as signs that this happy-go-lucky fiscal policy might not last forever.

Still, for now, the markets are staying upbeat. Investors, it seems, have learned to tune out the daily drama and focus on the bigger picture — growth, earnings, falling interest rates and the AI driven growth splurge. The world may be noisy, but the signal remains clear: for markets, there appears to be still some way to go. Do have a good weekend.