This is the third in a series of articles appearing every Monday in the Crimson, which deal with current political and economic question in the light of stock market reactions. The Crimson has been fortunate in securing the services of an astute observer of stock market conditions and his excellent opportunity for viewing affairs on the Exchange reccomends this series to all men interested in market fluctuations.
Quick, Watson, the Needle
During the first week of October, some sixty-odd millions were pumped from the public reservoir into private pockets against fourteen millions for the comparable period in September. With election day only a month away, the meretriciously minded may suspect an ulterior motive for this sudden increase in the blood transfusion. Retail trade and the consumer goods industry in general will respond favorably to this infusion. The obverse side of the picture is less heartening with an impending decline in oil prices, as well as restricted motor production until stock in the hands of the dealer has been moved. Commodity prices have been drifting lower for weeks, although there are indications that the decline has been checked and a reverse movement may be impending.
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Petulant or Perplexed?
Recent utterances of the President Indicate an obviously defensive attitude for which there can be no political reason as the Democratic flood continues unabated. Power is a headler potion than alcohol and morning after headaches more certain and severe. To the philosophic observer his recent remarks savor of disillusion as one who reluctantly must lay aside cherished dreams to achieve bread and butter. Perhaps it is realized that the Brain Trusters' panaceas may precipitate an industrial crash that will beggar the recent banking collapse unless the New Dealers secure the cooperation and help of practical business men. Platitudes and generalities will no longer suffice. Action not words is needed.
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John the Baptist
For weeks we have listened to the voice of John the Baptist Pecora crying in the wilderness of Wall Street, "repent ye, for manipulation is no more". It will be interesting in view of the marked evidence of pool manipulation during the past ten days in certain stocks so happily designated by the noted British economist Angas as "rubbish" shares, to note what action, if any, the Securities Commission will take. Or, maybe only "manipulation" for a decline is to be censured. An interesting stock to watch is McLellan Stores, which, in the midst of, or emerging from reorganization activities has scored a phenomenal advance accompanied by a marked increase in volume during the last few weeks.
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The Whether Bureau
As expected, prices continue to rise until they are some ten points from their September lows, and now hesitate at the 96 level (Dow, Jones) mentioned last week. From some nearby point a reaction may be expected and new buying should be deferred until then. This despite the fact that an advance through 98 would indicate probable further rise to near the 100 level before reacting. It is better to buy on a reaction than on the crest of a wave that has already gone a considerable distance. American Radiator (ADT) and Bendlx Aviation (BEX) for low priced issues seem to hold distinct possibilities. We still like Southern Pacific (SX) among the rails, and oddly enough there ought to be two or three points in National Power and Light from around 8, in the utility section, which is now probably at the peak of its disrepute.