Assorted historical stuff:
Charles J. Correl and Freeman Gosden, AKA “Amos 'n Andy,” NBC radio stars, sign 5-year sponsorship contract with Pepsodent Co. (toothpaste) ; will make them highest-paid radio entertainers ever.
Editorial: If Congress is to be reapportioned by results of the census, would result in large increase in political power for West and small one for industrial East, at expense of South and “habitually insurgent” Midwest; uncertain if Congress will do this or exercise its option to ignore the census results as it did in 1920.
US oil production has been fortunate for whales; since a mature whale produces about 50 barrels of oil, 1929 US production of about 1B barrels would have consumed 20M whales. Whales should now be more secure barring return to fashion of the corset, with consequent demand for whalebone.
In past 5 years, Bell telephone system wire mileage increased from 39.9M to 68M; workers from 280,000 to 365,000; calls daily from 45.8M to 63M.
Waldorf-Astoria orders phone system from NY Telephone capable of handling 10M-12M calls annually.
“Refrigerated” movie theaters have been doing good business in the heat wave; one theatergoer told manager it was his first good sleep in 3 days.
Bears continued operations to start the week, attacking US Steel, other major industrials, and utilities. Volume dried up on declines; some buying came in after cooler weather and forecast of some rains in drought areas. Fairly vigorous rally developed late; US Steel, Vanadium, Consolidated Gas rebounded sharply. Utilities weak; banks and trusts mixed. Bond market very dull and irregular; govts. and high-grade corp. steady.
Short interest has increased considerably in past week, drawing in some outside sellers in addition to the usual professional bear traders.
Resistance to decline taken as encouraging; sign that overly margined accounts and forced liquidation are no longer helping bears, as in previous breaks. Prospect of business improvement is also better due to seasonal factors. Also encouraging that market advanced in spite of higher call money rate.
Goodbody & Co. now advise caution: “There is nothing in the news to cause any haste to buy stocks ... This week should test the market further, and we advise caution in making commitments on either side.”
Next week's market movements considered very significant; break below 211.84 June bottom not expected and would be discouraging. Up to this point, market resembles that of 1920-21, including break in May/June, rally from end of June into July, range-bound trading for about a month, and further break in August. June resistance level held; this also marked bottom of business conditions and laid the ground for the great 1920's bull market.
Economic news and individual company reports:
Strange dispute between France and Britain about gold shipments required by gold-backed currency. Conditions have been such that Britain has been required to ship large amounts of gold to France. Britain has now said it will only ship “standard” gold bars (91.6% gold) instead of “fine” bars (99.5%). France not willing to accept them since refining “standard” into “fine” bars is expensive; “it would be wiser for nations, when establishing the 'gold-bullion' standard, to define what they mean by 'gold bullion.'”
Chain stores, grocery stores, and restaurants generally had a poor July, including Sears, Ward, Woolworth, Kresge, Safeway, National Tea, Childs. Biggest decline in sales was Sears, 14.9%, most declines in single-digit percentages; few companies showed gains.
Commerce Dept. reports economic conditions in Latin America generally worsened in 1929; attributed to high money rates, low commodity prices.
Yields on South American bonds range from 6% for highest rated bonds (Argentina, Uruguay), to over 9% for lowest rated (Bolivia).
Brokers' loans on Aug. 1 were 5.49% of total market value of listed shares vs. 5.83% on July 1 and 8.87% on Aug 1, 1929. Value of loans was $3.689B vs. $3.728B and $7.473B. “All other” (commercial) loans at Fed. Reserve member banks down $57M in week ended Aug. 6, demand deposits down $134M.
Call money was up to 2.5% in spite of decline in brokers' loans; taken as possibly bullish sign of increased credit demand.
New York produce merchants estimate prices will go up 25%-100% this week due to drought damage.
Companies reporting decent earnings: Melville Shoe, National Electric Power Co., Equitable Office Bldg., American Bank Note (stock/bond certificates).
“'Ladies All' - A good cast in a passable American rendition of a somewhat ostentatiously naughty French comedy.”
+ The Boring Stuff: