"Traders at the opening of the Stock Exchange today were cautious, with the list losing two-thirds of Saturday's gains in a quiet session. The cool reception which the totalitarian press gave to President Roosevelt's peace proposal dampened sentiment. Reports to the effect that Poland had agreed to return Danzig to Germany relaxed the tension, but gains from the day's lows were small. At the low levels, losses were extended to more than three points, with metals, motors and rails leading the opening decline, but later losses were partially recovered. Buildings weakened in face of continued favourable news from the industry; steels recovered somewhat after the release of a report shawms that operations were at a new low since the first week of the year, due to previous anticipations of such a happening: and, business ccntinued to contract, due to war fears to Saturday, when they turned into substantial buyers, Investment trusts are 90 per cent. invested, and no formidable buying is anticipated from this source. Waiving domestic or international developments, buying impulses were most potent during the period 1935/1937. but are not too strong at the present moment. Whether because of war fears, disappointment over the seasonal recovery or the New Deal's economic dilemmas, speculators have lost courage.
Business has receded since December, with only trifling interruptions. The trend is distinctly contra-seasonal Barron's index adjusted for trend is currently placed at 60.2, owing to the sharp contraction in the coal output. Thus far, no collapse like that of 1937/1938 is yet in sight. The heavy industries are suffering most. Earnings of oils and steels are unsatisfactory, without the promise of gnificant improvement. Defensive stocks have proved to be better speculative vehicles than conventional industrials.
The traditional background of a bear market is lacking; no excesses of finance or business, no liquidation 9f loans or inventories combination. The contra-seasonal business recess sion and a grave war scare broke the market.
The next few weeks should determine whether private initiative in to which the reduction in steel opera- jussiness is as low as in finance.
Text read from the printed page and cleaned; old type leaves the occasional error.