Market Notes
By CUSTOS
ATER the great political and financial storm, the markets on the Stock Exchange opened very quietly—with the lowest turnover for twelve months—but went sharply easier on Tuesday after Wall Street had suffered its worst setback for two and a half years. The Dow Jones index dropped over sixteen points to a new 1966 low of 852.8. It was the biggest fall since President Kennedy was assassinated (when the index fell twenty-one points). The panicky selling was prompted partly by the dear money-new taxation complex, partly by fears of sterling devaluation. Economist Elliot Janeway, in his weekly service letter, published an interview with a Swiss banker, who said that a sterling devaluation of more
than 10 per cent would provoke a reflex de- valuation of every currency in Europe, Swiss and French francs included. This would hit the big American corporations with European sub- sidiaries, who would have to repay loans from the Euro-dollar market with the proceeds of earnings in European currencies. Right or wrong.
Janeway has a Wall Street following which is made distinctly bearish by his current prognos- tications of a business slump in West Germany and Britain. This Wall Street bearishness coin- cides with market sentiment in Throgmorton Street. Most brokers' letters are anticipating lower prices for equities this autumn.
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