Market report .
CUSTOS
The stock market has once again broken its record. All of the 6 per cent fall from the peak of 19 July—when the Financial Times index touched 492—has been recovered. On Tuesday of this week, a strong late demand, with blue chips most wanted, took the index five points higher, to 495, and the 500 mark looks well within reach.
What at first sight seems curious is that this upsurge was the market's response to the July trade figures. These were worse than wa, generally expected, and the £80 million deficit which they showed suggested that too much had been made of the improvement in June (when the deficit fell to £50 million). No doubt fears of inflation were at work once more; yet another flight from money; though in fact the fixed-interest market took the figures as well a could be hoped. But it is inconsistent to argue— as some observers have—that the higher ex- ports will show up in company profits without asking where the far higher imports will show up. If both figures were moving up in step that would be another story. As it is, the im .port bill suggests the possibility of further attempts to restrain consumption at home.
Two brewers—Whitbread and Scottish and Newcastle—have turned in cheerless reports : Sir William McEwan Younger; chairman of S and N, claims no more than 'the negative advantage of standing still.' The Government, treating beer in the traditional manner as a politically sensitive commodity, is stopping the brewers from putting their prices up; and, as is known, sales earlier this year suffered from the changed law of drinking and driving. Breweries, though, are accepted as defensive stocks, and the investor whose mind is turn- ing that way should consider Whitbread at fifteen and a half times earnings, against twenty-two and a half for the market as a whole.
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