The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-05-05
INVESTMENT VIEWS
AND THE OUTLOOK
Market Letters Sound Louder
Note Of Caution, Although
Optimism Continues.
PREDICT RISE NOT ENDED
General Tone, However, Re-
veals Tendency to Advise
More Careful Scrutiny.

tensively In the weekly market letters
change firms to their customers than
II has for a long time. But there Is
also an undertone OF optimism running
through most of the letters. which in
dicates that in many cases the writer's
do not believe the rise is at or near Its
top. In fact one house declares that
1t does not believe the end or even the
middle Of the movement has passed.
Nevertheless there Is a different tone
In practically all Of the paragraphs on
the market. Where for weeks past there
has been a continued story of op-
timism as to the future OF the market
they reveal a greater tendency to advise
more and more caution in making COM
mitments under present conditions. The
following excerpts from some of these
letters give an idea Of their general
trend:
Goodbody & Co.: notwithstanding
tho nearly three months advance in the
market and the fact that April was a
month OF million and million and a half
snare days, we do not see the end of
the present bull market. We doubt IL
We have seen the middle OF 1t. From
now on we expect to see wider fuctua-
tons from day to day and week to
week. This does not mean that we
look for any big breaks in the near
future. We believe in exercising reason
able caution, but We see no great need
or warning against buying stocks or
ponds at present prices. We think that
this country is just waking up to great
industrial and financial opportunities
ahead OF 1t. As usual Wall Street is
the first to see coming events"
Hayden. Stone & Co.: zone must not
close ones eyes to the fact that many
stocks have had large advance. The
nrst stage OF the rise rs perhaps over
and level has been reached where one
must expect more frequent and more
severe reactions. but there Is no doubt
tnat the public are getting into this
market that the wave of speculation
and imitation is spreading and we do
not believe It will run its course until
many stocks that have not felt its in
huence are selling good deal higher"
Odd Lot ReUieU: TT is all justified,
every bit of 1t and more IL the public
is right about the immediate business
outlook. II. as soon as the treaty is
signed, a flood of foreign buying of our
goods comes into this market. our mills
VIII run at capacity. If the steel people
and the Railroad Administration are
able to get together on a price which
VIII result in steel mill operations at 80
to 100 per cent. of capacity instead of at
~ to 90 per cent. as at present It will
mean prosperity there and greater dis
oursements to stockholders"
Wrenn Bros. & Co: Each rest or
reaction In the market thus far has been
followed by further advances in special
ha oil I'M
or distribution rather than liquidation.
Nevertheless one should have in mind
that March and April are usually strong
months In the stock market. May sell
dom Is. The spring trade, the great
source OF optimism. Is over. Mercantile
activity, as displayed In bank exchanges
outside of New York. has almost ceased
to show pains. The proportion of profits
to expenses in most businesses as re-
Elected In the ratio OF bank deposits to
loans. Is falling Rates of interest are
higher than for the first quarter of the
year-abnormally high for this season,
ana the shrinkage in the business of our
mineral industries continues. Hence the
market is not likely to be as strong the
pext two months as 1t has been the past
two. Yet so long as heavy sales Of prod
ucts by manufacturers and wholesale
and retail dealers continue, one should
expect no great change in the broad po-
sition OF the market for the prime fea-
ture Of a peace readjustment is a gen.
eral curtailment of demand for goods,
due to elimination OF war wages and
profits. So long as heavy demand con-
tinues. war prosperity Is still In force
and effect and there is little or no rea-
son for stocks TO decline. One can see
mat dependence of the stock market on
k,,nt
and complete. Industrial stocks are the
backbone of the market. Their earnings
come from the large output Of manufac-
turing industries and this output de-
ponds on wholesale and retail sales.
Meanwhile one cannot forget that a sub
stantial decline in sales would cut the
very foundation from under the high su-
perstructure Of war prices and wages
and inflated earnings We think that
this is a traders market rather than
genuine bull market"
A. A. Housman & Co.: There is no
country other than the United States
fitted to fill the gap during the time
that Europe is recovering from the
prostration OF normal lines of produce
ton. Neutral as well as bellgerent
countries are taking steps to establish
commercial credits here. Developments
such as these are factors Frightening the
outlook for market for our surplus
products. In a stock market like the
present one there Is a constant shifting
from one favorite to another. This
may create thin market at times in
some directions. but that the upward
swing Is nearing the end We do not be-
lieve."
Paine Weber & Coz Technical
conditions were considerably impaired
by rapid advances during the week and
by somewhat reckless buying for pub
lie account. General surroundings con-
tinue favorable, and while some re-
adjustments may be necessary, recess
sions provide good opportunities to enter
the market from the investment as well
as the speculative standpoint Ending
of the war and resumption of normal
business activities are DEVELOPMENTS
which should be regarded with broad
vision as furnishing solid basis for
optimism regarding securities Inyes-
tors should understand that much of
the usual comment regarding the stock
market Is concerned with surface fluctu-
Guons OF five to ten points. Such move
ments may be ignored by those who
look to general trend OF affairs and
determine on a definite course of ac-
ton during constructive market De-
riod. There are admittedly some i'm
portant problems to be solved, but the
market has been discount!ng the logical
ending Of difficulties and as adverse
factors are removed there will be room
for numerous upward movements Of
much importance"
Clark. Chlds & Co. These are times
for hitting straight from the shoulder.
the financial community should get out
Afg Inn AL