The Bridgeport times and evening farmer., 1919-11-25
IL. WATSON'S
 WEEKLY LETTER

Latest developments suggest that the outlook for stock market activity is good. But contraction is indicat- ed in view of credit curtailment. From the additional liquidation that has occurred, good has come. Weak spots have been removed~fsz The short interest has Eenlarged-E- The banking element displays more dis position toward supporting prices against professional attacks. It may be necessary to have further loan re- adjustments in order to put money rates back to normal, as offerings of funds are still small, but considerable progress has been made toward a favorable outcome. During breaks from current levels, however, greater resistance will be found to includs investment selection. This character of buying is the best. We think it will be directed toward the stan dard rails. Many of them appear to be cheap. A decline of fifteen points in Southern Pacific, for exam pie, may compare favorably with q break of 75 points in some inflated industrial. The recent Supreme Court decision against the Southern Pacific involved onlF 5000 acres of oil land, leaving about 160, 900 to be disposed of in litigation that may not reach the highest court for many months. Southern Pacific stock could we'll be recovery leader. Specula- lively, and from a trading standpoint, the active market position of buying on reactions for turns, should prove profitable. Until the money situa- ton is satisfactorily adjusted, stocks will probably be for sale on sharp recoveries in the industrial list. Con- servative action and ample margins will bring their reward during the re- adjustment and afterward.
 Rejection of the peace treaty by the Senate may be considered imme- diately unfavorable because of the general market condition and pro- longatton of uncertainties associated herewith; but the safeguarding of American interests is paramount, and effective action in this respect cannot but be constructive eventually. This situation and the late port strike in New York have been largely reSpon- si5le for the demoralization in the foreign exchange market. The strike tied up nearly S500,000,00O of mer- chandise in shipping, preventing Iiqui- dation of loans. To this factor may also be ascribed to a substantial de-
 
 during the past two weeks, and ne- cessitated decisive action in stock market loan readjustments in order to take care of commercial pressure for accomm odation, as well as ap- preaching foreign financing.
 | We expect slow readjustment in ! financial and commercial fields, and | urge extraordinary work and saving in order that production may quickly catch up with consumption. We be- lieve in the optimism expressed by MT. Charles M. Schwab, chairman ot the Bethlehem Steel Corporation who says he is proceeding with con- i structive plans, confident of the flu, i ture. Notwithstanding the Reds l in the steel and the coal regions, MT | Schwab has faith that the great buIF I of American workmen will be true tc ! our traditions. The steel strike has l practically ended, but the coal dis l pute continues to operate for short i age of fuel, some manufacturing 1 plants being forced to shut down tenn | porarily for lack of it.
 ! Foreign countries are reported tc
 be negotiating for copper metal here