Assorted historical stuff:
Today is 10th anniversary of deadly bombing at Wall and Broad Streets; bomb exploded 12:01PM, closing Stock Exchange and almost all financial operations.
German elections result in National Socialist (Fascist) party gaining sharply to 107 seats vs. 12 formerly, and Communists 76 vs. 54 (total seats in Reichstag are about 576, and largest party is Social Democrats with 143). German observers were pleased Communist gains relatively modest. Gain in radical parties seen as result of depression. Communist party is affiliated with Moscow, while National Socialists are “anti-Republican, anti-Parliament, anti-Young Plan, ... anti-League of Nations, anti-Semitic, and anti-capital,” advocating establishment of “extreme dictatorship with socialist features.”
Editorial: Result of German election is hopeful. Two radical parties have made gains; if they took power, parliamentary rule could end, as well as reparations; this would create worldwide business unsettlement. However, radical parties are still in minority, and strongly oppose each other. There are several moderate parties that could form a coalition to continue the present govt.; this would ensure business has no cause for fear.
W. Graham, Pres. British Bd. of Trade, warns League of Nations Britain may withdraw from tariff truce in March; blames current economic crisis on US.
American Motorists Assoc. estimates car accident deaths for 1930 at 36,000, vs. 33,060 in 1929.
First Japanese sound film being made in Hollywood; to be shown in Japan and in the many Japanese areas in California.
623-year old lawsuit between Romanian cities of Feldioara and Sorkutza over possession of grazing land adjourned for new testimony.
Market wrap: Weakness in wheat market translated to pressure on farm-related stocks including J.I. Case, Sears, Woolworth. Weakness spread to the leading industrials including US Steel, Westinghouse. Volume again dried up on declines, and liquidation wasn't apparent. Banks weak, insurance stocks firmer. Technicolor and Diamond Match hit new yearly lows. Some late rallying took place off the day's lows. Bond market very dull; US govt. higher, foreign govts. firm except for substantial declines in German issues; convertibles weak.
Aside from commodity price weakness, business outlook continues encouraging; recent merchandising and transportation conditions point to further improvement in coming weeks, and steel industry reportedly will make a concerted effort to raise product prices. Aside from technical setbacks, market recovery is seen continuing at least another month, until it's apparent how strong the seasonal recovery is.
A large number of market students are “watching the trading for a sign that a turn has come.”
Reports of depression are difficult to square with ever-increasing numbers of stockholders, strong bond prices, and last but not least “the unabated rush in the subway. ... Business has fallen off, but the country is now so rich that 1930 will probably go down in history as a 'good bad year.'”
Recent renewed confidence in market outlook has brought back some of the operators who sponsored stocks during the Coolidge (1920's) bull market; among the stocks they have been quietly accumulating are Radio, Vanadium, Montgomery Ward, National Cash Register.
A. Robertson, Westinghouse Chair., sees slow, orderly return to normal conditions in business.
Economic news and individual company reports:
Fed. Reserve member banks weekly report Sept. 10 shows “all other” (commercial) loans up $16M to $8.462B, loans on securities down $32M to $8.351B.
Call money dropped back to 2% from 2 1/2%; prime commercial paper is at 3%; bankers' acceptances are at 2 - 2 3/8%.
Bond market showed strength in all classes in August; Dow Jones combined bond index closed Aug. at 82.93, highest since Nov. 1928. Low point for the past several years of 77.23 was reached in Sept. 1929.
New life insurance purchases in Aug. were down 8.7% vs. 1929; first 8 months were up 0.3%. Number of $1M policies was 357, up 45 from 1929.
Automotive exports in July were $19.0M, down 17% from June and 62% from 1929; first 7 months were $215.1M, down 46% from 1929.
Companies reporting decent earnings: General Foods, Jewel Tea (careful buying of coffee inventory).
Company reports since July 1: 221 companies reported higher earnings vs. 1929 and 477 lower; 1044 dividends unchanged, 50 increased, 89 cut.
Storm over Asia, directed by Pudovkin. “Another striking example of the Russian film producers' brilliant knowledge of the peculiar art of the cinema.” Sweeping film with beautiful photography”; story concerns Mongolian revolt against army of intervention; “the bourgeoisie are again bitterly lampooned”; film closes with wave of revolt symbolized by storm sweeping over Asia.
+ The Boring Stuff: