DISTURBING FACTORS

Evening Post, Volume CCXV, Issue 13, 17 January 1938, Page 12

DISTURBING FACTORS

BUSINESS UPSET WALL STREET RALLY LONDON STOCK EXCHANGE REACTION (J3y Telegraph—Press Assn.—Copyrißlii-' LONDON, January 15. The first Stock Exchange account of the New Year closed quietly on the defensive. Gilt-edged remain firm, though the prospect of new borrowing is tending to reduce activity. New Zealand issues are the weak spot among Dominion loans. " " .. 4. Foreign bondholders continue to have a worrying time. Chinese and Japanese issues have collapsed owing to the prospect of a protracted war. Midweek business tended to fall off in home industrials, and as a resuU prices''are ragged. In thece days each week can be trusted to bring its sensations to interfere- with ordinary • financial and business progress, for which reason City-business men accept philosophically the sudden French crisis which has halted the New Year improvement in the markets. There is little disposition to judge M. Chautemps charitably- among the financial Press. Wall Street has begun- to stage its recovery, though it is not based on the return of business confidence but is due rather.to hopes of Government spending on public works and rearmament. Better feeling in the United States has naturally helped the markets in London, the healthiness of whicji is shown by the way they are standing up to the French crisis and j the publication of the- trade returns, which showed an adverse balance of trade in 1937 of over £430,000,000, excluding invisible credits. ' SHIPPING INVESTMENTS. Shipbuilding figures revealed a falling off in new mercantile construction but it is expected that the naval estimates will be fairly generous and ensure a high level *of activity in the shipyards for some years. There has been considerable activity in shipping shares ■ owing to rising freights and the market expects a considerable increaseinthe demand fortonnage during the next two months, as freights are .likely to improve further. I COMPANIES'PROFITS. The "Economist's" analysis of company profits, which is ■■ • one of the earliest available pointers of probable changes in the national' revenue, is reassuring, 2279 companies having reported an average increase of. 17 per cent, in .their profits after paying debenture interest. — ■ The 1937 index of profits .reached a new high record of 113.2 compared with 100 in 1929 and only 63 in 1932. It iriust, however,, be remembered that nearly 70 per cent of the profits analysed • were earned ■ • before April, 1937. METAL MARKETS ACTIVE. Th6'rh'etals exchange passed one of iti most active weeks for some months. The United States domestic price for copper was raised three times in a single day, resulting in a burst of speculative buying, but the demand has fallen off at the higher' price. Russia and' Japan have been, buyers of metals, Russia, it is reported, as agent for China. Rubber is firmer but, like metals, closed at under its best rates.