The sun., 1919-07-28
INVESTMENT VIEWS
AND THE OUTLOOK
Brokers' Letters Show Belief
in Ability of Market to
Go Higher.
BUT SOME URGE CAUTION
Most Of Them Advise Buying
on Reactions-Others Favor.
Realizing on Bulges.

Realizing on BulgeS.
Confidence In the ability Of the stock
market TO go higher and higher Ii the
chief characteristic of this weeks batch
OF brokers' letters on the immediate out
look. Almost without exception those
letters point to the way the market has
handled bearish news with scarcely any
trouble. Immediately prospective devel-
opnents are believed pretty generally to
be OF a decidedly favorable nature mar
ketwise, according TO their writers.
Some of them are more conservative
than are others. urging more caution IN
making market commitments, but they
are practically unanimous in their opin-
ion that the top OF the upward movement
is still ahead. Purchases on all reac-
lions are urged by nearly all houses.
Some OF them advise profit taking on
the bulges, with consequent repurchasing
on subsequent declines.
Paine, Weber & Co. say: "1ndica-
lions point strongly to increased divi-
dends, other special favors to stockhold-
ers, new corporate combinations and
similar developments which are decid-
edly constructive and promise to keep
investors from selling stocks, even where
new commitments are not made. The
market should remain In a trading area
for time. for IL the large loan account
is not to be reduced by extensive hdui-
dalton Il will have to be corrected
through the gradual process Of payment
for stocks in full which Is always an
important factor. and by provision Of
additional margins from time to time
A resting period would do much to re-
store q normal money and credit situa-
ton, but enthusiasm regarding the mar
ket seems difficult to restrain. We con-
tinue to feel that the general conditions
related to business affairs warrant In
vestme<ts in the leading stocks where
recessions provide favorable opportun-
tiles for commitments"
Market Acts Well on Bearfsh News
Merrill. Lynch Co. say: The stock
market this week has acted exception
ally we'll In face of all the various bear
ish news that came out on Tuesday and
Wednesday. This news was used as
much as possible to break the market
by traders who were short and wished
to cover their stocks The selling was
very poor and stocks were well taken
on the decline, so that when traders
turned around to buy their stocks back
they found they had to jump for them.
In spite OF the big rise in the market we
feel that stocks will sell much higher
and we are very bullish on the general
situation for long pull. although sharp
reactions are likely to occur from time
70 time"
Richardson Hill & Co. say: Making
due allowance for all impediments, we
should not be surprised to see-a fairly
wide gap in the flow Of American goods
abroad, pending the tuning up of the
new machinery of international finance
and this In turn II likely to interrupt
stock market buoyancy later on. To be
sure, security prices have ignored to a
large extent the late slackness In the
iron and steel trade, owing to Implicit
confidence in its ultimate reco very. Yet
delay in the broad negotiation Of export
business would hamper that recovery
more or less. Such considerations -ts
these, in conjunction with the probable
ity of stringent money during the height
of the crop moving season. suggest that
August is unlikely to furnish the specu-
lative fuel which has been so abundant
thus far in 1919. The present buoyancy
of prices however. is undeniable. and II
is the spirit of the times which carries
the market forward, operators In stocks
evinincing the determination to cross no
bridges of difficulty until they are actu-
ally unavoidable"
Wrenn Bros. & Co. say: whether
one believes that the bull market is con-
tinuing or that distribution of stocks to
the public is now the main purpose OF
the largest holders, the rallying power
OF the market must be recognized. Even
in distributing movement the market
rallies well after breaks characterized
by precipitate selling. II was SO during
the distributions of 1916. 1912. 1903
1906 and 1902. and It should continue a
be so, because after bull movement the
public becomes so eager to buy on re-
cessions and so regretful over not hav-
ing previously bought as to regard a
break in prices as a blessed opportunity
Not until persistent realizing sales or
the part of large interests have pre-.
vented prices from going to new high
levels throughout a period of several
months does the enthusiastic public
cease to regard a break as being m OPP
portunity. On the other hand II ID
equally probable that the advances into
new high levels will be small. and thai
stocks bought should soon be sold Just
when the market looks strongest The
monetary situation, although 1t occa'
sionally shows appearances of improve
ment, is evidently unsound at heart
Time rates have now followed the ad
vance in call money; and the rise II
commodity and good prices is competing
with the voluminous issuance of new
securities in a race TO absorb every par
ticle of the nations supply of liquid cap
ital or loanable funds. Existing high
money rates, too, have come to pas
quite in advance OF the crop movement
for this movement does not begin In sub
stantial volume until about the end OF
August"
Look for Trading Market.
Block, Maloney & Co. say: During
the next few days we look for a trading
stock market, with alternate back and
forth swings, but giving good chances
for profits. The comparative ease of cal
money makes for Condolences people
generally interpret It But this is {
false premise. The supply Of money Il
no greater. and any imitation of stock
will bring more spasms and liquidation
We continue to urge sales on the firm
spots. as crop moving requirements and
demands for financing of foreign loan
will draw from the stock market. Spe
cialties will furnish the lines of leas
resistence these including public neces
stiles SUCH as food products. There Il
current talk about shipping issues anC
rails commanding more attention"
Halle & Stieglitz say: 1--WE would
continue to caution against overtradinl
but we believe more than ever that tn
constructive side of securities is tn
proper one to adhere to. We would bu!