10 DECEMBER 1937, Page 46

STOCK MARKET PROSPECTS . Can the trade recession be halted

and, if so, how soon ? My own view is that it can be checked effectively at a very early stage provided we get tangible evidence of a recovery in the United States within, say, the next two or three months. The flotation of three good-sized trusts with glittering boards promises to provide the London stock markets with just the kind of cushion of which it has recently stood in sore need, organised and intelligent :buyers now standing ready to counter any fresh outbreak of stupidly nervous selling. This at least ensures that if markets do break again it will be for some good and sufficient reason and not merely because a minority of hysterical speculators and investors have decided to cut and run. I am convinced that the knowledge that these trusts are standing in the background ready to pick up cheap lines of shares will itself bring a powerful steadying influence into markets.

As for the American outlook, I am not yet prepared to advise investors to budget on a quick recovery in spite of the Administration's ambitious plans. Better business in the U.S.A. next year is still, I think, a probability but by no means a certainty, and I would rather wait and be surer than :take a speculative view of markets just now. Big Business, it seems, is to be given a breathing-space but it is not yet convinced that when it has recovered its breath it will be allowed to retain it. That is not, kpropitious. atmosphere for a recovery campaign, and until Wall Street feels that the President has changed his heart as well as his mind, I cannot imagine there will be any sharp upturn in business. Meantime, having indicated an amber light to genuine investors in last iveek's notes, I see no reason to show anything but a red signal to any would-be speculative buyers seeking quick profit.

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