The Washington times., 1936-06-22

on An and these have yet recovered the ground lost
the April reaction. The small traders and t3s PuO
have not vet taken hold When they do it seems likely that
many of the backward issues will parcpate II So
the composite will rise considerably above the Ap
peak. ,oo :,
stocks on last Wednesday touched the level of February To-
where the utilities topped out and that this is the lever
which was lower resistance during March lb-3O W."
ronoh this level that the market plunged the bad break
of April 90 Some hesitation natural here By the same
token further progress be looked upon as significant
"peneration."
Wall Street has not been unanimously bulsh and con-
siderable trading has been inclined to fight the May
recovery Of the public following mas oeen V!
small This condition, however, has made for better tech
cal position good many traders last week had begun to ee
that they had missed the boat AS result "ouo noI
surprising find the pong through on the up SIDE
rather vigorously of these days.
On the whole it seems to fundamentals favor the
rise High taxes inevitable Labor troubles threaten
ing afterthe bonus etdown in business may occur
later on But other hand find the following factors
l. Money very low, and unlikely to rise much
This increases capitalized value of fairly certain dv
income from group of stocks 1t makes attractive TO
buy and hold any selected and diversified group of stocks
which are priced times earnings SHARE and
which yield promise to yield better than per cent
2 Credit initiation and reduced purchasing power of cur
rency Government spending Government
borrowing and that serious Tightening OF credit 1t
increasing bank deposits and large reserves AS
to currency the injections of overvaued silver and
the that the devauaon of the gold dollar has not found
full expression commodity prices both Indicate further de-
probation in the paper dollar.
In the absence greenback nfao the foregoing situation
should in time bring optimistic "credt initiation and
rising prices
g. Refundng operations, while checked, have been
heavy and had results One has been decrease
fixed charges and increase the net income of
panes The other has been drive thousands of bondhoder
into the stock marketas result of calling their hshled
bonds
Finally think it reasonably clear that political develop
mens favor the stock market The New Dealers are on the
defensive and will therefore be cautious and less radical
The intelligent radical element in the country (Coughn
Townsend etc being driven to consider third party
This will be futile but will reduce the strength
of the New Deal At the time the reorganized and
liberal Republican party has become effective and bets
Roosevelt promise to fall basis before long
The Canadian court decisions against the DOmnons New
Dea and the the French New Dealers getting no
will have their psychological effect object lessons.
The general effect to and investors
Property and contract rights safer Monetary extremes
less probable Utility and railway regulation is less likely
be drastic Thus the capital goods industries electrical
equipment, steel, etc. have better chance.
And neither party will stand for defation