FINANCE AND
INVESTMENT
ONCE again the stock markets have run into bad political weather and once again they have demonstrated their resisting power. Whenever tension becomes really acute prices have to fall even if selling is only very light ; that is because buying virtually dries up and jobbers make lower and wider quotations as a precautionary measure. So far, however, selling has been very moderate and in the exchange market the pressure on Sterling has not been severe. Technical strength tells in times such as these, and just as there is no speculative " bull " position to be liquidated in Throgmorton Street, so there is precious little " hot " money left to be withdrawn from Lombard Street. Conse- quently, the influence of politics is seen most clearly, not in any precipitate fall in prices or in the value of the pound, but in a contraction of turnover. This is all to the good from a general standpoint but very dismaying, of course, to stockbrokers and others whose livelihood depends on commissions.
Foreign politics apart, the news has been mixed, but on the whole reasonably good. While the gilt-edged market has had to square its shoulders to the burden of the un- successful London County Council loan and seems fated to undergo a lengthy process of absorbing undigested stock, industrial Ordinary shares still have a following wind from the figures of employment, bank clearings and 1ailway traffics. Indeed, it becomes clearer month by month that nothing short of really dismaying political developments are going to prevent a fairly broad business recovery in this country. Even making full allowance for Armament Profits Duty, as now amplified by Sir John Simon, I should be disinclined to sell good industrial equity shares at this juncture.
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