FINANCIAL NOTE S
CHEERFUL MARKETS.
CHEERFULNESS continues to be the outstanding note in the Stock Markets and although at the time of writing prices are a little under the best, the general tendency of investment stocks—indeed, of most stocks—continues to be in the upward direction. I suggested a fortnight ago in these columns that the influence of the lower Bank Rate was bound to be of a far-reaching character and this has proved to be the ease, while events such as the repudiation of the " Reds " by Labour Leaders and the collapse of the seamen's strike have imparted a little more confidence even to such markets as that for English Railways and Home Industrials. At the same time, and without in any way suggesting the likelihood of any great change in market conditions, there are two circumstances which must not be overlooked in any general consideration of the Stock Exchange outlook. One of them is the unsatisfactory trade position of the country, to which I have already referred, and the other is the almost inevitable steady efflux of gold from the Bank following the lower Bank Rate, coupled, of course, with the unsatisfactory trade position. At the end of last July the Bank of England had gained nearly 29,000,000 in gold since we returned to the Gold Standard: to-day, however, the net gain is changed to a small loss. I am not forgetting that when writing recently on the subject of the lower Bank Rate I suggested that the reduction would not have been made unless the Bank were prepared to lose a considerable amount of gold, and also that we were in a position to afford to part with large stores of the metal. This is not a view I desire to modify in any way ; I merely suggest that when considering the market outlook, the unfavourable trade figure and the drift of gold must not be ignored.
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