The Washington times., 1934-06-14

manu- SS1GlLIlSuO
is one of hope SsM#1
fulness and in - ~
creaSing conf Lewis Haney
dence that the market will do
better. Let us examine the forces
at work.
1. AS to the underlying condi-
tions, probably the most import
ant is the prospect of increased
Government spending. This has
at least three aspects: (a) as
counteracting the reaction in
business, (b) as stimulating bust
ness this fall, Co as leading to
further public debt and thus to
infaltion. Looked at in any one
of these ways it is considered
publish" marketwise.
No careful student has ceased
to considered initiation as a fac
tor in the market. In fact, so
many Of the more farSighted
have made provision against
the thing, that am inclined to
think that the average investor
is in the attitude of really want
ing a little of it. This, by the
way, illustrates how the barriers
to control gradually break down
vice is a monster, etc.,
In this connection, we should
note the continued piling up of
demand deposits and the huge lex
cess reserves" in the banks. The
effectiveness of all this credit" is
limited by the fact that it is arti-
ficial and due to government bor-
rowing and spending, put it is
hard to see how it cas4 help but
"break loose" some day.
The silver bill is about to be
passed.
2. AS to more immediate factors
pertaining to business, one notes
first the growing probability that
no general steel strike will be
called. There may be sporadic
Walkouts, but nothing more. Prob
ably the Administration will now
ask and get emergency powers to
deal with strikes, in lieu Of the
Wagner Bill.
There are apparently we'll
founded reports that mortgage
money" is loosening up. This, to-
gether with the little squirt in
building permits and the probable
early passage of the housing bill,
may bring some improvement in
the much depressed building
trades.
Some response to automobile
price cuts appears to have oc-
Cured. A fair volume of loco
motive and freight car business
has recently been booked by
Baldwin and by Pullman, respec-
lively.
We may add that securities
financing prospects have picked
up following the amendment of
the Securities Act, and the new
Stock Exchange regulation act is
being accepted by Wall Street in
> good spirit.
8. As to the more technical
indications, / note the follow
ling: the more comprehensive
averages" closed at new
high for the move on Tuesday.
The most active issues were up.
Railway stocks have shown
strength of late. Bonds made
new highs on the move.
A fair sized handful of stocks
have made new highs for the
year, including Dome and Wal
green, among those which have
been mentioned in this column.
On the other hand, we must
hote the disturbed condition of
foreign finances, particularly in
Germany. Steel production seems
to be slipping, and railway car
'loadings seems likely to show less
than the usual seasonal increase
for last week. The textile indus
try in not in good shape, and the
oil industry at the moment is un-
settled by overproduction.
The short interst has been
greatly reduced, while public in
terest in the market is, on the
whole, at low ebb. Nor is there
IN sight anything to bring the
public in in any large way.
Finally, the action of the mar
ket in the last few days may
be described as backing away"
from an upper resistance.
It seems we'll to be cautious
here Eventually HIGHER prices are