Market vs. Trade

One of the interesting features of the stock market is the frequency with which its price movements contradict both the optimism and pessimism expressed concerning the future of business by corporation officials.

Just such a difference of opinion now exists regarding the automobile industry. The stock market has recently assumed a somewhat sceptical tone on this subject; stocks of prominent motor companies have experienced marked drops. In Wall Street the talk is mostly of overproduction, inflation by sales on part-payment, diminishing margin of profit, increased and bitter competition and similar gloomy matters. On the other hand, the trade in its announcements and its advertising fails to share this melancholy tone. Alfred P. Sloan, Vice President of General Motors, declared sales of his cars to dealers this Spring would be 20% greater than last year, while stocks of cars on hand with the Company amounted to about ten days' current production.

Mr. Sloan's statement of course applies to a single company, generally recognized to be in good condition, and it does not deal with a future further away than this Spring. But by the beginning of Summer, it will be possible to determine whose predicitions are best--those of the stock market or those of automobile companies.