The Bank of England recently warned that stock market investors are ignoring mounting risks in the global economy. Warren Buffett has also been vocal, recently saying that parts of the market today resemble a “casino“.

Yet many blue-chip shares just keep heading higher. Should I be worried about this?

A far-from-perfect backdrop

The FTSE 100 index has jumped roughly 20.5% over the past year, while the tech-heavy Nasdaq 100 has doubled that. Admittedly, a year ago was a low starting point because that was when President Trump opened a can of worms in the shape of punishing US tariffs.

With major indexes not far off all-time highs, clearly most investors are not too concerned at the moment. Yet global food prices have just jumped for the third month in a row, driven higher by the Iran war. Cereal, vegetable oil, and meat are all up.

Meanwhile, oil and energy prices are high, piling more misery on inflation-weary consumers. I have one friend who’s debating whether the family’s annual summer trip to Greece is affordable this year.

Naturally, many companies are also cautious. For example, JD Sports Fashion said earlier this week that it expects a drop in profits this year due to consumer pressures from the Iran war and high youth unemployment.

The Middle East conflict is far from over, with much of the inflationary pressure has still to work its way through the system this summer. Then there’s Ukraine, where the tragic war grinds on, threatening to spread to neighbouring countries.

To top all this off, there’s the AI wildcard. This technology is allowing companies to become more efficient, potentially leading to millions of jobs disappearing worldwide in the next few years.

Given the backdrop, I’m quite surprised that investors aren’t more worried. InterContinental Hotels Group (IHG) stock, for instance, just hit an all-time high week. I own IHG shares, so I’m not complaining. Just a bit baffled!

Dry powder

Now, I should say that none of this is to scare anyone. Remember, corrections are perfectly normal and even a healthy part of stock market investing. They’re usually a tremendous time to put money to work.

Therefore, it’s probably wise to have some cash on the sidelines in case we see a pullback this summer. In the meantime, I’ll continue to invest when I like what I see.

What stock has caught my eye?

Diageo (LSE:DGE) has certainly struggled with weak consumer spending and changing drinking habits among younger generations. Its share price is down 53% in five years.

Given everything I’ve written, and the ongoing consumer weakness risks, you would think I’m keen to avoid Diageo. However, while I’m not going to buy any shares at all-time highs, this unpopular one looks attractive to me for a couple of reasons.

First, world-class brands like Guinness, Johnnie Walker, and Smirnoff continue to grow globally in many locations. And turnaround specialist CEO Dave Lewis has identified ways to make Diageo more competitive to boost overall volumes.

The stock also looks cheap, trading at 13 times forward earnings. There’s no market froth here — quite the opposite.

Finally, the stock’s sporting a 3.1% dividend yield, so it could boost my passive income while I patiently await a potential turnaround. I reckon the Guinness maker is worth considering today.