New York stock market

Title

Creator

Loveles, Glendon B.

Language

English

Source

The American Chamber of Commerce Journal Volume XVIII (Issue No.12) December 1938

Year

1938

Rights

In Copyright - Educational Use Permitted

Fulltext

December, 19 38 THE AMERICAN CHAMBER OF COMMERCE JOURNAL 2\ New York Stock Market (December I Oth) By Glendon B. Loveles Ovejero & Hall The principal question at the pre sent time is whether or not indus trial production, if it continues to mount at as sharp a rate during the immediate future as is presently in dicated, will not outstrip consump tion. If such is the case, some mo derate recession in business activity may be witnessed. Whether the current setback in the security market reflects a possible slackening off of industrial produc tion or whether it represents mild fear over new European develop ments, is a question difficult to answer. In either case, it appears quite certain, from the market’s ac tion, that no great apprehension exists in the minds of investors over the ultimate outcome of the latter. Normally, the market between Thanksgiving and Christmas is called upon to absorb a fair amount of liquidation for tax purposes, and this fact has no doubt contributed its share to the current mild recession. In last month’s article, attention was directed to the danger of con tinued industrial recovery at the pace witnessed during the past seven months and the current flattening out of the business activity curve is considered favorable in that it re presents digestion’ and consolidation of previous gains and will, no doubt, ultimately provide a basis from which the general upward trend of business activity will emerge. Recently, some apprehension has been expressed over the possible de flationary effect on the national eco nomy of the striking political gains of the Republican party in the Nov ember elections. However, it is hardly likely that the Republicans (even if they had a Senate and House majority which they have not) would dare (politically or economically) to curtail present spending plans. What reasonably can be expected, possibly, is that the spending authority of the President will be curtailed and Con gress will make its own allocations of public work and relief funds. In any event, the peak of deficit spend ing will probably not be reached un til late spring or early summer and there will be sufficient time to re appraise the situation, from a mar ket standpoint, prior to that time. Definite lessening of apprehension over the foreign situation would pro bably result in a resumption of ral lying tendencies which meantime, however, may be confined to mode rate proportions. The modern world has grown so small that the development of a dy namic bull market in America pre supposes an accompanying improve ment in other world centers. Serious consideration must be given at this time, therefore, to a major factor which may contribute to general un certainty in world security markets, namely, the very uninspiring action THE TEXROPE DRIVE NEW DEVELOPMENTS “HEX TEX” THE EARNSHAWS HOCKS « HONOLULU IRON WORKS 60-118 Second Street, Port Area P. 0. Box 282 Manila, P. I. Branch Offices: Tel. 2-32-13 Bacolod, Occ. Neg:. Cebu, Cebu of prices on the London Stock Ex change and the attendant implica tions of its failure to respond to the spectacular improvement in the American economy and to the appar ently improved political and econo mical developments at home. The week of April 2nd, 1938, marked the low for American security prices as measured by the Dow-J ones indus trial-average which at that time stood at approximately 103. At the same time, the London Financial Times average closed the week at approxi mately 104. Today, thirty-five weeks later, the American average has risen over 44 points, while the London IN RESPONDING TO ADVERTISEMENTS PLEASE MENTION THE AMERICAN CHAMBER OF COMMERCE JOURNAL 22 THE AMERICAN CHAMBER OF COMMERCE JOURNAL December. 19 38 market has declined, hovering peril ously close to new low ground. Technically, the New York mar ket appears to be gathering strength, and ominous news dispatches from abroad have so far failed to shake OVEJERO & HALL STOCK, COMMODITY & EXCHANGE BROKERS MEMBERS MANILA STOCK EXCHANGE NATIONAL PRODUCE EXCHANGE NEW YORK COFFEE & SUGAR EXCHANGE 6th Floor, Wilson Building Juan Luna, Manila Tel. 2-10-51 Cable Address OVERALL, Manila out any appreciable amount of stock. Seasonally, a rise can ordinarily be anticipated during the early months of the year and present market ac tion justifies the belief, barring un expected adverse developments abroad, that higher prices may be seen within the reasonably near fu ture. Overlooking, therefore, a fur ther period of indecision and irregu larity during coming weeks, the longer term outlook currently is for a continuation of the recovery cycle. A Timely . . . (Continued from page 18) knowledge, reflects to a great extent con ditions as they now exist at the mine. We realize that mining at best is a hazardous venture and these estimates may prove ex tremely optimistic as present future pros pects become history. On the other hand, we believe that there is sufficient reason to presume that instead of these estimates proving exceedingly optimistic they may very well exceedingly conservative. For this reason; the progress of San Mauricio over the next few months should be watched closely in order to fully participate in any change in market price, which will only be reflection of actual operations and condi tions as they exist at the mine. The Stock . . . (Continued from page 20) moment no reason why any parti cular weakness should develop pro viding world conditions remain about unchanged. In assessing the possibil ity of a reaction it is well to bear in mind that although the averages have staged a considerable percentage ad vance this has been largely accounted for by wide gains in only a few indi vidual issues. As these are apparent ly fully justified, in almost all cases, the market may not be in as vulner able a position as might be expected after such a sustained upward move ment. The likelihood of any runaway rise appears to be equally slim. Local and world conditions are not ripe for such a movement, however, it would appear that the present healthy con dition of the majority of the produ cers, and near producers, coupled with the increasing dividend dis bursements, would bring confidence and money enough to support a price structure irregularly higher than that to which we are now becoming accustomed and could lead to a some what more active market early next year. IN RESPONDING TO ADVERTISEMENTS PLEASE MENTION THE AMERICAN CHAMBER OF COMMERCE .JOURNAL

pages

21-22

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