Fund managers cannot afford to be too sniffy about the equity markets for the simple reason that so much of their portfolios are held in shares. But if Merrill Lynch's latest snapshot is right, then more and more of them have turned into sellers of UK equities. Just 3 per cent think the economy will improve over the coming year, while and earnings per share are expected to grow by a measly 5 per cent in 1998 and 1999.
Meanwhile, the retailers reported another bad month for High street sales. Like-for-like sales were up just 1.5 per cent on the year, better than June's 0.1 per cent fall, but still not great.
Dig a little deeper, however, and the picture doesn't look quite as bleak. Buried away in the Merrill Lynch survey is the interesting fact that although fund managers may not like UK equities, company directors are buyers of their own shares. Historically, there has been a close correlation between the direction of the market and directors' dealings.
Put simply, the managers of our companies have proved better judges than their owners of the state of the stock market So yes, it is of concern that so many fund managers are switching out of UK equities, and yes, it is of concern that so many have been downgrading their profit forecasts.
The net effect yesterday was to drive the market another 90 points lower. But August can be odd month for markets, when the trading is thin and the professionals are on holiday. A better test will come when the August sunshine is replaced by Autumn's first bite.