FINANCE AND INVESTMENT
By CUSTOS
MASS opinion in Throgmorton Street is so rarely right that I find it hard to believe that markets can be as unpromising as they seem. From modified hopefulness the Stock Exchange has been steadily drifting into a view not far removed from utter despondency. After the mid-March slump prices have held up reasonably well, but even the big institutional buyers, who can usually be relied on to take a hand when prices get hopelessly out of step, have scarcely moved. The real trouble, as I have recently stressed in these notes, is that the sudden increase in the war risk has aggravated the risk, already serious enough, that the recession in trade may get deeper in the next few months. Add to this situation the renewed slump on Wall Street and the Budget hurdle now looming on the market horizon, and it is not difficult to see why investors and the vast majority of speculators have made up their minds that this is a time when little can be lost by waiting.
Meanwhile, I am afraid that even if we are happily spared from fresh political shocks in the near future, markets here must revolve around the Wall Street-Commodity Price axis, and at present the news from that front is not very encouraging. Nobody can now anticipate a genuine spring revival in the United States and one's hopes for commodities must be correspondingly dimmed. Nor, at the moment, is it easy to find any adequate reason for thinking that American business is likely to recover quickly. The Administration is still trying to move in several directions at once with the not unnatural result of getting nowhere. Railway car-loadings are 25 per cent. below last year, unemployment is over 12,000,000, and I imagine that business 'psychology is just about as depressed there as is political psychology here. Unpalatable as the advice is both to give and to get, I can only recommend a waiting policy.
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