Another record for FTSE 100 near 7,300

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Another record for FTSE 100 near 7,300
"Dilly ding, dilly dong!" screams Leicester manager Claudio Ranieri to gee up his team of highly-paid footballers. Well, investors are certainly in no need of the Italian's amusing encouragement, as the FTSE 100 (UKX) barges its way toward another significant milestone Wednesday.

Stretching its incredible run since 5 December to 21 winning sessions out of 25, the leading index traded as high as 7,293.26 mid-morning. It's now up over 1,500 points, or 26%, since the Brexit-vote low, and 1,800 points, or 33%, since the China-led crash had it at a multi-year low of 5,499 last February.

Conversations in dealing rooms and some living rooms, not just in this country but overseas, are busy with speculation about where next?

That 7,300 level could prove a visual deterrent for many, at least in the very short term as Donald Trump prepares to deliver his first news conference at 4pm London time, just 30 minutes before the London stockmarket closes.

Carefully-worded speech

Time, then, for at least some reaction Wednesday to what will surely be a carefully-worded speech designed, one would imagine, not to panic either humankind or world financial markets.

Assuming he plays a straight bat, 7,300 might not put up much resistance. We've been here before with 7,000, and look what happened.

Many investors may be tempted to trouser profits ahead of Trump's inaugurationAt this point it's also probably worth repeating comments from our revered chartist Alistair Strang, published here on Monday.

"This remains interesting," he said, "given the immediate cycle points at movement above 7,211 is now supposed to achieve an initial near-term 7,272 with secondary, if bettered, at 7,320 points."

After that, things become less clear, and I admit I'm among the many shaking their heads and thinking surely our domestic equity markets could do with a breather.

If markets don't freak out on Trump's conference - the Q&A is a potential minefield for the amateur politician and social media addict - might the temptation to trouser profits ahead of his inauguration be too great?

graph 1

If there's tough talk on trade tariffs or about taking steam out of the dollar, watch out. Add flesh to the bone on his fiscal stimulus promise and it's onwards and upwards.

Yes, valuations have looked scary, and still do for some stocks, but a glance at the top 100 index shows two-thirds of companies trading on less than 20 times forward earnings. One year further out and it's four-fifths, and over half below 15 - predictably, domestic earners like housebuilders and retailers are cheapest.

Sector rallies

And, currently, just as rallies in one sector peter out - oil has been quiet the past few weeks - catalysts trigger a baton change to the next "hot sector", as we've seen with the supermarkets these past couple of days after both Morrisons (MRW) and now Sainsbury's (SBRY) beat market expectations.

And its Sainsbury's that's leading the FTSE 100 higher Wednesday. It's up as much as 7% to an eight-month high, and buyers are still chasing yesterday's star stock Morrisons.

Ahead of its Christmas trading update in a fortnight's time, Dixons Carphone (DC.) - stockbroker Justin Urquhart Stewart's Interactive Investor tip for 2017 - is up almost 4%.  Investors are also backing Marks & Spencer (MKS) ahead of tomorrow's third-quarter results.

New World Bank economic forecasts predict a recovery in global growth to 2.7% in 2017Miners have hardly put a foot wrong - up 14% in the past three weeks - and Anglo American (AAL), BHP Billiton (BLT), Antofagasta (ANTO) and Rio Tinto (RIO) keep moving higher.

It was also interesting to note comments from Barclays analysts earlier this week, reminding us that high inflation tends to be "positive for commodity returns".

The broker is currently tipping US inflation to hit 3% by December, adding that it believes US trade tariffs and de-globalisation are also pro-inflationary.

Also worth noting are latest World Bank economic forecasts, just out, predicting a recovery in global growth from 2.3% last year, a post-crisis low, to 2.7% in 2017.

Plenty to worry about, yes, but lots to like in 2017, too. Don't fight the market.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.