The Santa rally is in full cry. The FTSE 100 index is up more than 300 points, or 3.5 per cent, in the past month, and it is perfectly possible that it will hit 10,000 by the year end.

Shares often rise towards the year end, hence the expression – and a couple more good days of trading and we’re there.

If that happens, it will be thanks to America, for we are getting a boost from its share-price boom.

There is a wall of money there and it doesn’t take much of it switching out of the US high-tech giants to have a disproportionate impact on share prices here.

You see this dominance time and time again. London trades flat throughout the morning, then after lunch, if Wall Street opens higher, prices here climb too.

Of course the reverse occurs, with weak share prices in America clobbering us in the UK. But for the moment Donald Trump is playing Father Christmas – however improbable such an image might seem.

So what is next? Now is the time when the various wealth managers and investment banks make their predictions for markets for the year ahead.

It is an exercise they have to do because their clients demand it, but if anyone had perfect (or even decent) vision on what would happen, they would keep it to themselves and never need to work again.

However, the thinking behind their forecasts gives a snapshot of the pressures on the world economy, and the hopes for it.

If there is a general message, it is that there will be a year of decent global growth, driven by artificial intelligence (AI) and reasonably cheap money, though the interest rate cycle will bottom out by the middle of the year.

The implication for equities is another good year. For example JP Morgan forecasts double-digit gains across major markets in both the developed and emerging world. Goldman Sachs predicts a broadening of the bull market, with gains driven by higher earnings across the board, rather than depending on a few AI giants to jack up overall returns.

There are a few more cautious views of course, but the overall average prediction is for the S&P 500 to rise by 11 per cent, down from this year’s 16 per cent, but still a very decent performance and way ahead of inflation.

There is, as always, a contrarian view. There has to be, for it takes two views to make a market.

Warren Buffett has indicated he is cautious. So too is Jamie Dimon, boss of JP Morgan.

Michael Burry, who made a fortune from getting the 2008 banking crash right – as featured in the book and film The Big Short – is warning of an AI bubble and considers Bitcoin worthless. But what I can’t find is any major financial institution, as opposed to a prominent individual, saying they think share prices will crash.

This optimism in the US is reflected in generally positive views about equities in London. Most analysts expect the Footsie to go through 10,000 in the coming weeks, and the average prediction for the end of 2026 seems to be 10,800. So not as good a performance as this year, but well ahead of inflation. This is in marked contrast to the general mood about the economy, which is dire, and understandably so.

Insofar as we can trust any of the figures, it hasn’t grown for six months and the private sector is shrinking. Any growth at all has come from higher Government spending, financed by borrowing.

So climbing share prices will be a sign that if the world economy continues to grow that will be fine for the major companies that are represented by the FTSE 100 index – most of them are selling to the world, not just to Britain.

But a solid performance by the Footsie says nothing about the deeply troubling domestic outlook, or the prospects for firms that depend on it – most of the smaller and medium-sized enterprises that employ 60 per cent of the private sector workforce.

If they continue to shed labour, as they are doing right now, this would be a social disaster as well as an economic one, as it would be especially bad for young people starting out in entry-level jobs.

So, welcome to the Santa rally – but be aware it shows we are increasingly a two-tier economy.

Fine for the big companies, not fine at all for the small.