MARKETS SOBERING

Evening Star, Issue 22638, 3 May 1937, Page 9

MARKETS SOBERING

INVESTORS NIBBLING AT BARGAINS SHARP RECOVERY IN RUBBER FORECAST Press Association—By Telegraph—Copyright LONDON, May 2. (Received May 3, at 1.85 p.m.) There are already signs that markets will be more sober next week. Liquidation has spent itself, but it is unwise to prophesy, Thursday’s settlement is awaited with some anxiety, as heavy differences must be met. If it passes without trouble it will open the way to slow recovery on a broad front. Investors are already nibbling at bargains which in more .normal times would be considered too good to miss. The financial Press is advising cautious purchases, stressing the attractiveness of certain industrials, and forecasting a sharp recovery in rubbers, of which dealers are short of stocks. The ‘ Economist ’ considers that Mr Chamberlain was undoubtedly right in stressing that the effects of the profits tax were exaggerated, nevertheless normal conditions are impossible until tax uncertainties are cleared up.

The present quotations of many sound shares are the result of fear rather than careful- weighing of investment factors. Nevertheless, there is scope for a further all-round increase. The earnings of industry on the scale of the past four years are becoming narrower. Costs are rising and Labour is restive. Opportunities for increasing the profits of some developing industries still exist, but it will not be surprising if the major rise in equities is past. One result of the present heart searching has been to focus attention on the importance of maintaining Britain’s export trade. There is a growing feeling that manufacturers should not allow rearmament orders to lead to industry disequilibrium, or to draw off productive activity from export trades on which Britain’s prosperity rests. The movement in favour of revision of the Ottawa agreement is increasing. Even the Government, is realising the importance of widening the area of world trade and lowering of tariff barriers in order to encourage foreign countries to buy more British exports. Commodities have suffered from heavy selling, hut have withstood it reasonably well. The ‘ Financial News ’ considers that the long-term trend of i commodities should) be definitely upwards, though henceforth it will be more selective. WOOL. The strength of wool is especially notable, and if Russian competition develops next; week prices will go still higher. BUTTER. Butter is quiet on a rather difficult market, but Tooley street merchants do not anticipate a break in prices. APPLES. Supplies of fresh apples appear to he inadequate to meet the strong demand and prices are firm. The situation is likely to continue, as buyers are short of stocks. i