Evening star., 1928-12-31

THE early prospects. say. for the
motor industry are bright. The used
car market is not clogged IN export
trade should continue in go3d volume.
Still. as 1929 advances. the supply Of
used cars may become quite burden
some. AS I see it, a still larger pro-
portion of sales will be concentrated in
the hands of the biggest units. This
trend may force more mergers or
squeeze out some of the independents.
Sooner or later profit margins. except
for the favored few. must dwindle. Too
many have concluded that a company
is in a good position because the indus
try as whole is going ahead Perhaps
only few automobile companies out
of the total will make good profits in
1929!
Building Outlook.
"What about the building industry,
which in the last few years has played
such vital part in our economic life?
believe this industry should continue
at fairly high levels through the first
part of 1929. However, many sections
are facing an overbuilt situation which
will act as a definite check upon ex-
tensive speculative building New build
ing started in the Spring of 1929 is ex-
pected to show a decline, with some
slowing up in building operations later
in the year. Further marked expansion
will be delayed until building wages and
other factors are more fayorably ad-
justed.
"The outlook. however, is by no means
Identical for all classes of building and
construction. Residential building. in
the moderate price and the non-specu-
lative field. should show considerable
activity. There are few indications Of
curtailment in public works. In fact,
If there should develop a marked fall
ing off in the building industry as a
whole, there is the probability that
public projects could be released in sub
stantial volume. Mr. Hoover. as I have
said, is thought to favor an effort to
use public building programs as an eco
nomic StabiliZer. The recent proposals
looking toward this end have given new
to the building and con-
struction activities Of Federal, State
and municipal governments. We can
undoubtedly turn to this quarter with
increased assurance if there should
come need for taking up the slack in
other branches of the industry.
Metals Outlook.
"The outlook for the metals Is mixed.
The iron and steel industry is in a
much more favorable position than a
year ago. True. demand factors are
shifting somewhat, but a steady level
of production is indicated at least
through the first part of 1929. In this
connection it is important to follow the
automobile industry most closely. AM
bilious production plans are under way
and the demand from automobile man
rfo -, fNv. .-fr IL, H.
Large amounts of steel will be re-
quired by the agricultural implement,
building and machinery industries. De-
mand from the oil industry is expected
to improve, and some day the railroads
are going to buy equipment on larger
scale Copper, after its sharp rise, is
expected to hold steady near present
prices for a while. Production Is on
the increase and in time should catch
up with demand. Undoubtedly copper
producers will endeavor to keep the
market steady, as present prices give
them a satisfactory margin OF profit
Low-cost copper companies will surely
make money this year, and I believe
stocks of such companies may web Ne
retained.
Trend Toward Easier Money.
"a survey of all these factors a,g-
gestS that as the year goes on there
will be a trend toward easier money
Although rates later in 1929 will prob
ably not subside to the levels expert
enced in the Summer OF 1927, never
thelesS there is the prospect that rates
will become somewhat easier. Looking
at the near future, it appears hardly
probably that money rates Will be
greatly affected by gold movements, as
these will probably be of relatively mod
crate volume. On the other hand, some
observers anticipate that the Federal
Reserve Board will tend to become an
increasing factor in the financial Situa-
tion and will more aggreSsively seek TO
exercise control. At all events, during
1929 there will be a tendency to favor
business loans at lower rates and to
discountenance excessive stock markes
loans.
Bond Market Should Improve.
Because Of the prospects for some
what more ease in money in 1929, the
sentiment in favor Of bonds is likely TO
improve during the coming months.
The downward tendency in prices that
has been experienced should give way
to a Sidewise trend for the list as
whole. The prospect Is for an improve
ment over current conditions. This
need for most discriminating care IN
choosing issues. In fact, never before
In financial history has there been such
necessity for carefulneSS. The present
is an open season for inferior pre-
ferred stocks and bonds. Diligent search
will reveal some attractive purchases
in the bond lists, but the unwary are
very apt to go wrong in this present
period.
Stock Market Outlook.
"As to stocks, the one who presumes
to give an opinion on the market Is
considered crazy like the market it
self. We must. however, remember
that action of the few volatile leaders
In the market has been entirely differ
ent from the balance OF the LOCO OF
more issues on the exchange. The ac-
ton of these leaders has been more .
state of mind than anything elsa.
America Is for the first time being
really sold to Americans, and there
we're not enough shares OF the popular
issues to go around.
Under these influences the small
doating supply Of the leaders creates
4 situation where they skyrocket up
ward. AS soon, however, as buying for
any reason SlackenS they drop faster
man tney went up-A 1acC WHICH H.
amateurs very emphatically
discovered about a month ago. I be-
ieVe this process Will be repeated from
now on aS fasa as stocks are over
1T Is "a open question. however,
whether the so-called Dow-Jones aver
ages will soon soar to tho nights Of the
Hoover election BOOM 1t is safe to
;ay that Congress Is not pleased with
such insane speculation. Neither are
he wisest and most influential finan-
,ial men. I know it is popular to say
hat we are in new era, that Yields
IN stocks are going to be much lower
han we have been accustomed to. and
hat the coming years are going to be
/ golden age for the United States.
Still, you cannot make a stock go up
orever without proper earnings, and
wen granting that the United States is