Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-12-30

velopment will be heightened by the
disposition of European investors to
buy back their own dollar bonds is
sued in the market. The long term
| outlook is for a gradual return of
Europes ability to finance it's own
needs to a larger extent.
Prospects of Reaction.
Fourthly, with speculative security
prices on the average at or near the
peak for all time, the prospects of
sharp reactions during 1927 must be
recognized by every prudent observer
When and if after renewed periods of
widespread speculation by the I'M
tutored public the stock market ulti-
mately gets into a weakened position,
as it may during the forthcoming
IL months, the price structure will
40 doubt once more become subject to
sudden raids. superinduced by panicky
selling and excitement. AS long as
credit conditions remain unchanged
there are likely to be rallies from
sharp declines. This probability Sug
Gests the danger of trading with prices
near top levels thus far on thin mar
gins. which can readily be effaced by
sudden short-term shifts. on the
other hand, there is nothing on the
economic horizon to indicate that the
recent rise is merely the prelude to
nearby protracted bear cycle of major
proportions.
The stock market is likely to be
come increasingly selective during the
forthcoming months, with investment
stocks in which the dividend is as
sured in favor. Moreover, securities
Of companies that can continue To
make high profits in spite Of growing
competition are likely to be favored.
Depression-proof industries, like the
/ 49, "A ri
cheap shoe are likely TO receive spe-
cial consideration. On the other hand,
! there will be an increasing search for
! vulnerable overeXploited issues.
| Filthy, business is likely to become
! increasingly competitive, with the do
nestle struggle heightened by in
! creased foreign manufacturing zeal.
/ This situation may increase the num-
! Der of business failures and stimulate
the tendency toward mergers. 1t will
| also encourage the development of
| scientific management and the elimi-
| nation of waste.
/ Readjustments Likely.
Sixthly, there is likely to be some
reimbursement within industries. Many
! observers anticipate at least mod
crate slowing down in the building
trades, which for several years has
/
motive trade win also be challenged
| by past records, which set a breakneck
speed for sales managers.
! Seventhly, wage levels are likely to
remain staple, with little chance of
general further wage increases, al
! though some groups which are out of
! line are likely to be raised.
Eighthly, European demand for
| American cotton, copper wheat and
other foodstuffs is likely TO rise with
improving economic conditions over
seas.
Ninthly. France and Italy are likely
during 1927, to follow the general
movembent toward hard money basis
and to formally stabilize their curren-
cies. There seems to be a better than
even chance of French ratification of
the debt agreements with the United
! States and Great Britain.
Tenthly, business faces no prospects
of serious interference in the matter
| of national legislation during 1927
| Political risks are not causing business
leaders much concern, in spite of the
fact that the criticisms of the admin
! istration, as a forerunner to the 1928