Evening star., 1933-01-15
BONDS SHOW SIGNS
OF STEADY UPTURN
IN WEEKS TRADING
investors Are Switching to
Second-Grade and Spec
uIative Groups.
Special Dispatch to The Star.

special DiSpatch 10 Inc star.
NEW YORK, January 14.-The in
| vestment market this week has ex-
! hibited some of the signs that usually
| prelude sustained advance.
High-grade bonds were checked in
their upward movement as investors
| corporate and individual, sold them In
! favor Of ssccnd line descriptions with
higher yields and better poSSibilitie1
of appreciation More significant than
this. perhaps, was the first sign of a
break in the long continued rise OF
| United States Government short term
notes, certificates and bills.
The United States Treasury had to
! pay about 15 of per cent to borrow
S60,000,000 for 80 days. d rate almost
twice what it had paid two weeks
earlier; while notes and certificates,
| some of which had risen to such dizzy
i heights that the buyers were actually
! paying the Government for the privilege
| Of lending money to the Treasury,
eased off for the first time in months
| This movement did not extend to Gov
ernment long term bonds.
Public Interest Appears.
High-grade corporation bonds. which
have been rising for weeks, were pushed
up early in the week to levels where
their yields reflected scarcity values
but this advance was checked when a
sudden demand appeared fer second
| grade bonds. At the same time specu-
lative obhgations-many of which have
been influenced by no other cause than
the movements of stocks for months
] were marked up and moderate public
! interest appeared in the bond market.
! Trading rose from S7,000,0O0 or So
100000 to over S15,000,00o daily-a
| volume ordinarily associated with an
| active market.
The markets advance was bread
| and, what was more encouraging, was
the renewed activity in the new cap
ital market. The year end reinvestment
demand, which is usually grossly ex-
| aggerated, could not account for all
| that was happening in bonds Nor
could 1t be accounted for by improved
| business activity.
| OF idle money ready to hand, otherwise
! it would be impossible for all divisions
OF the bond market to exhibit strength
at the same time.
The foreign dollar bond market has
improved with the general list. The
advance OF European bonds, in particu-
lar, was started when a slight easing
in foreign exchange restrictions en-
abled Europeans to buy their own bonds
But after German and other issues had
had an average advance of to Is
points, the Europeans found them a
little expensive for their purposes and
the tail end of the advance in these
! bonds has been caused by domestic
| buying, most of it of a speculative
nature
Domestic Issues Recommended.
Market analysis for some DAYS now
have advised these with profits in Eu-
rcpean bonds TO consolidate their gains
by switching into sound domestic bonds
even where loss of income is in
CURED by so doing. The World Eco
nomic Conference is the next hurdle
in the path toward worldwide rehabil-
itation and it is inconceivable that the
preliminaries to it can be passed with
cut some unsettlement Of the market
for foreign bonds South American is
sues have been marked up without any
f; good reason. as there is no change fol-
the better in the picture there. Japa.
nese bonds have been influenced BY
the renewed fighting in Manchuria.
Copyright, 1887