Show ECONOMIC O TREND n ALSO FAVORABLE I The two evil Inflation Is and Interest rates have played an important role in the disappointing performance of the industrial segment of the stock market since 1977 began These are understandable influences influences in influences in- in but it may well be true that tha t there has been some overreaction with respect to these two factors There should be at al least an interim period of letup in inflationary inflationary in inflationary in- in pressures And while short term interest rates are arc likely to move somewhat higher in second half 1977 an early return to double digit interest rates for short term borrowings does not seem likely Actually the vital signs of the economy at this stage provide considerable encouragement for the stock market in indications In to date are arc that economic activity during the first six months of the current year ear has been running at a q somewhat stronger pace than was thought possible in the midst of last winters winter's siege of bitter weather fo Everything considered prospects favor a continuation of the ho upward trend In business over the second half of 1977 with consequent favorable implications for stock market prices |