The sun., 1919-05-12
NEWS
AND THE OUTLOOK
Technical Position of Stock
Market Is Weaker, Say
Letter Writers.
URGE EXTREME CAUTION
Many Favorable Comments on
Recent Action Of Rails
Are Made.

stock market has been weakened greatly
appears to be the general opinion among
commission houses, judging from the
contents of their weekly market letters
10 customers. While all are somewhat
hesitant about advising the sale of
securities, yet most OF them have a more
or less uncertain ring and extreme eau
tion Is the urge OF all
In the letters many favorable COM
ments as to the manner in which tho
rail- shares have firmed UP during the
past week and predictions of better
prices for those securities with the con-
vening Of the extra session of Congress
TO consider the railroads needs are
made; The following are excerpts from
the letters:
Hayden, Stone & Co. say: THE next
test of the market win come with the
signing OF the peace treaty. AS TO this,
there are two schools of thought per
haps almost equally logical, one that
this will be the signal for industrial re-
vival and expansion that cannot help
but stimulate the market, the other that
the market has been discounting the
event and with its contamination would
suffer relapse. Paradoxical as II may
seem, 1t Is not at all impossible that
both may be right. at least to a lin
tied extent. No doubt a good many
stocks have scored most OF the advance
that could be expected on their PROS
poets for some time to come. On the
other hand. It is difficult to believe that
this movement will come to an end until
others, which have Jagged far behind,
have discounted n revival OF their busi-
ness. The public IL beginning to come
In and TO some extent the position of
the market technically is weakened.
One cannot afford to be 20 indiserimately
bullish as three months ago. but the
market does not collapse with the en-
trance of the public, but with Its exit
In our opinion IL will be a good while
before this takes place.
Hambleton & Co. says: at was hest
tant market which started the week,
due to several uncertainties. which had
accumulated. and realization that Mon
day was merely day in between The
diff1dence which characterized trading
in tho earlier hours soon gave way to
| confidence, and on Wednesdays reopen
| ing the buoyancy OF the speculative list
| was well sustained by realization that
! the peace treaty was almost a fact ac-
| complished, and that industrial condi-
| tons generally were looking up. On
| the heels of this came the formal an
| nouncement that the executive had
| Issued a call for an extra session of
| the Congress to meet in ten days. In
| all of this the market read progress
and betterment. 1t was interpreted that.
| in addition to disposing Of the peace
| treaty, the Congress would undertake
to rectify the evils which have grown
out of Government control In emergency,
provide adequate appropriations for the
payment Of our national debts and Inn
mediately proceed to readtust business
to the altered status OF our national life.
! The resulting advance in speculative
issues had @ hardening tendency on rail
| and other securities, and though the
! former have failed to advance materially
they continue to show the strong under
I lying tone which Is born OF optimism
1 that the day OF REIMBURSEMENT Is not
far of Million share days continue to
be the rule with most OF the trading OF
a speculative character centreing in
| oils, shipping and industrials.'
Market wcakens Technically.
| Paine. Weber & Co say while we
recognize the favorable aspects OF the
general financial situation We find that
the technical position of tho market
| has been somewhat weakened and are
disposed to recommend comparative con-
| servatism in commitments. There Ia O
little too much OF speculative overex-
| tension and the pace has been too rapid
without healthy recessions ouch as nor
| mally occur in bull market. For a
very long time it has been possible 70
secure quick and substantial profits
| through purchases. not merely OF abso-
lutely sound stocks. but of many others
| which have advanced under aggressive
buying with leadership OF pool and trad
ing interests. Little discrimination has
| been used. and any unexpected occur
l ence of unfa7orable nature might have
lions of the list. such as the railway
copper and steel shares. have not parti-
cipsted freely in the advance. Imitation
| il largely in specialties and special is
, sues. The trend Is becoming less con-
| sistent In such stocks. and more or less
Of a market readjustment seems to be
in prospect There are numerous stocks
which would be very attractive at a
reasonable concession from current lev
els, and investors should. in our judg-
mcnt, consider these opportunities with
care as they may appear"
c. ]. Hudson & Co. say: ''If this is a
rea. bull market. founded on sound fund.
| amental reasons. as, we believe II Is
then 1t must have its reactions or else
1t will collapse altogether. 1t has thrown
caution to the winds this week and gone
ahead In some parts OF the list as Il
the sky was the limit. Buyers abound
stocks are gobbled up at any old price
and. where the most danger lies, those
stocks seem 10 be preferred which have
advanced the most. Such a situation
has naturally been taken advantage Of
by those who were wise enough to buy
cheap a few months ago. when pessi
mism prevailed, to sell dear now wher
loptImism abounds This distribution
while enormous has been largely in the
shape OF hedging profits by short sales
rather than actually taking them, 80 a.
TO avoid paying heavy income take.
thereon-an ingenious plan. which boil
protects and saves This selling hal
had no appreciable effect 30 far any
more than to put lot OF stocks into
weaker hands"
Wrenn Bros. & Co. say: 1.-THE marie
continues to move upward. The trac
lions look decidedly unattractive anC
attempts TO inject life into the minor
rails contain but little promise. Nearl!
all OF the railways represented are show
ing heavy losses of net earnings, an,
the whole railway situation is to be de
cided by the next Congress. Even
congress of flnanciers would find tn,
problem difficult because of excessive
wages. demands OF shippers for lowe
rates, rundown condition OF way an,
equipment and necessity OF pleasing
voters. The chief reasons for tn
strength of the market are presuma bl,
continuance OF boom in our expor
|, trade. activity OF most OF our manu-
featuring industries, optimism engen
6ered by nearness OF legal peace, con
vening Of Congress expected to hav
constructive ability, frmness OF the bont
msrlast based in part on investmen
/