The Markets: Plus ça change, plus c'est la même chose

The more things change, the more they stay the same. Below is a daily summary of the Wall Street Journal from 1930. They talk of a bull market and a summer rally as well as credit expansion by the Fed. It is shocking to read in light of what is happening now. The past truly is prologue.

Thanks to newsfrom1930 for the content and James In Japan for the tip off.

Market commentary:

Bulls encouraged by resistance to repeated bear efforts Saturday and Monday following explosive rise Friday; buying movement spread broadly across the market early. Major industrials strong including US Steel, GE, Westinghouse, as were major utilities and rails (Consol. Gas, New York Central). Steel news caused some irregularity, but good buying appeared on setbacks. Bond market firm; corp. and preferreds up; govts. steady; Dow 40 bond average at new yearly high of 96.61.

E. Johnson, former Pres. Victor Co. (merged with RCA), returns from trip to survey conditions in Europe; feels general US business recovery under way, will be comparatively rapid up to a certain point; thinks stock prices somewhere near bottom.

Conservative observers even more cautious than usual; believe recent rally due to oversold condition, and decline will resume when short-covering ends.

Some market students encouraged by repeated support above June lows, advise buying leading stocks if they again approach these levels.

J.H. Oliphant & Co. finds Dow action this summer technically interesting; 6 times since June, market has found strong support after declining to 215-218 level.

Bears reportedly less confident after last week's action, though short interest remains large. Public participation still seen small.

Increase in credit outstanding in first half was interpreted bullishly, but has stopped since mid-June. “This may mean that stimulus to business in the form of credit expansion induced by Federal Reserve policy has reached its effective limits ... ”

Economic news and individual company reports:

US rail freight loadings for week ended Aug. 9 were 904,157 cars, down 14,178 from previous week and 187,966 from 1929; worst decline yet vs. 1929.

Steel production industry-wide was at 54.5% last week vs. 56% previous week and 58% two weeks ago; US Steel at 62% vs. about 62.75% previous week and 64% two weeks ago. Decline was unexpected; some improvement had been rumored.

Oil curtailment still working: Gasoline in storage at refineries Aug. 16 was 41.252M barrels, down 1.477M in past week; refineries operated at 72.6%, up from 69.1%; crude oil production was 2.464M barrels/day, down 16,800 from previous week and 478,000 from 1929.

Public utility earnings generally higher year over year in each month, though declining month by month this year. June net earnings of 95 utilities were $83M vs. $79M in 1929, but lowest of year so far and down from high of $92M in Jan.

NY City budget for 1931 expected over $600M vs. $569.8M this year.