Since the FT "leak", Footsie has climbed, comfortably absorbing the inevitable profit-taking, by 265 points.
And, for once, the action has not been confined to blue chips. The FTSE 250 MidCap index has stretched to new peaks and even the third and fourth- liners making up the FTSE SmallCap index have started to move ahead although the art of achieving new highs is still proving elusive.
The undercard's poor display for most of the year has been a mystery. It could, in part, be due to the growing influence of overseas investors who are reluctant to play outside the perceived safety of established blue chips.
It is, perhaps, the activity of foreign investors which has wrong-footed so many home- grown fund managers. As the blue-chip bull run has gathered pace Tony Dye at PDFM fund management group has resolutely stuck to his cash-is-best argument and missed most of the fun and profits.
Now it emerges that another fund manager, Gartmore, has been journeying on the same bearish bandwagon as "Red" Dye. It has raised its liquidity to 17 per cent, much more than the industry average. And it plans to continue to run down its equity exposure because the joint chief executive and chief investment manager, David Watts, anticipates a bumpy road ahead with the market declining sharply.
Other leading fund managers are cautious. Mercury Asset Management is not thought to be renowned for its bullishness.
It is quite clear many fund managers have expensively misread the equity market. Cynics might be forgiven for suggesting that is why so many of them continue to express their preference for Government stocks in the monthly Merrill Lynch survey.
The rush to demutualise has had a dramatic impact on Footsie with fund managers, particularly those running index trackers, forced to buy financials to retain the balance of their portfolios.
But while many fund managers have cast a jaundiced eye over equities, the Johnny Foreigners have been buying and buying. They regard London shares as cheap, a view supported by US investment house Goldman Sachs, which said last week: "Valuations on UK equities have become even more attractive." Its strategists, Jeffrey Weingarten and Neil Williams, are convinced the soaraway EMU display was justified. Goldman Sachs is also bullish on New York, seeing the Dow Jones Average at 9,000 at the year end.
Bob Semple at NatWest Securities has lifted his end-1998 estimate to 5,700 and has had a shot at predicting Footsie at the turn of the century - 7,000 points is his estimate. BZW is shooting for 6,000 by the end of next year.
Just how strongly blue chips have run ahead of expectations can be judged from Mr Semple's January prediction. Then he said Footsie would end the year at 4,600, and at the time he was one of the most optimistic forecasters in sight.
Although there is a growing enthusiasm over longer-term prospects, a few observers nurse nagging doubts about the remaining months of this year. Higher interest rate fears lurk. US rates are expected to increase soon and there could even be a domestic hike this week. So fairly subdued year-end Footsie forecasts, such as the revised Semple estimate of 4,800, continue to be heard.
The market is unlikely to draw much support from this week's batch of company results. The list is thin with the tills of supporting retailers providing much of the action. Attention will focus on the House of Fraser department stores chain. An interim loss, say pounds 3m, is expected. The group has been a disappointment since arriving at 180p three years ago. The shares ended last week at 206.5p.
New management under John Coleman has been installed. It is still wrestling with problems it inherited. In April Mr Coleman described some of the merchandise HoF was contracted to buy as "crap". There is enormous scope for recovery and hopes are high HoF will be in profits in the second half of the year. Morgan Stanley's Julie Ramshaw is looking for year's profits of pounds 28.7m; NatWest's John Richards is on pounds 33m.
Thorntons, the chocolate group, should continue its revival with year's profits, before exceptionals, of pounds 11.5m; Goldsmiths, the jewellery chain, will produce a small first-half loss - nothing unusual as most of its profits are made in the run-up to Christmas.
JJB Sports, one of the bustling sports retailers, should score with interim figures. The creation of former professional footballer Dave Whelan, who broke a leg playing in the FA Cup Final for Blackburn Rovers, JJB has traded strongly and with store openings contributing, should produce resounding profits. Robert Miller at Dresdner Kleinwort Benson is shooting for pounds 13m (pounds 7.2m) and expects to increase his year's target of pounds 32m.
Builder Keir is likely to produce interim profits of pounds 8.4m (pounds 7.3m).Reuse content