Tabell’s Market Letter – June 04, 1976

Tabell’s Market Letter – June 04, 1976

Tabell's Market Letter - June 04, 1976
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TABELL'S MARKET LETTER — 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER AMERICAN STOCI( EXCHANGE June 4, 1976 It should come as news to no one that 1976 is a Presidential election year, and we have .,…men,tlOl'leJjprgvJouqJy,inthiss p1ce thaLthisfa cthnuJdbe,ta ken. into ,account-in ,acmacket f-or-eca st-. -W-e ….- have, in the past, tabulated the election-year pattern, and the table below is an update of that study complete through May of 1976. It shows, for each year, the President elected and his party, followed by the average price for each month, expressed as a percentage of the previous December's close (I.e., 110 means the market was up 10, and 90 means it was down 10). Year President Jan. Feb. Mar. Apr. May June Aug. Sept. Oct. Nov. Dec. 1900 McKinley R 101 103 104 lOS 100 98 98 99 97 100 108 114 1904 Roosevelt R 102 99 99 101 99 99 103 107 112 118 125 126 1908 Taft R lOS 100 lOS 111 117 117 123 126 125 126 134 138 1912 Wilson D 100 99 102 106 lOS lOS 106 109 109 109 108 103 1916 Wilson D 99 98 97 96 98 99 98 99 102 lOS 107 103 1920 Harding R 99 91 97 96 91 89 89 86 89 89 85 77 1924 Coolidge R 103 104 102 100 99 101 101 113 112 110 115 119 1928 Hoover R 99 98 103 110 113 108 108 112 120 123 131 132 1932 Roosevelt D 103 101 102 76 66 59 63 89 102 88 87 82 1936 Roosevelt D 102 108 112 112 104 108 116 118 120 126 130 128 1940 Roosevelt D 99 98 97 98 85 76 80 82 86 87 88 85 1944 Roosevelt D 102 101 105 101 105 109 112 110 108 111 110 115 1948 Truman D 97 92 94 101 106 110 108 104 103 106 100 99 1952 Eisenhower R 102 100 100 100 100 102 105 106 104 104 105 109 1956 Eisenhower 1-960-Kennedy R 97 ,98 104 lOS 103 102 107 106 103 102 100 102 8—99….,…,98-92-939296-93-94-9-29,1.,—93-97– 1964 Johnson D 102 103 105 107 109 108 III 110 III 113 115 112 1968 Nixon R 98 94 92 99 101 104 104 101 lOS 108 109 110 1972 Nixon 1976 R 102 103 106 108 107 106 104 108 107 106 112 115 109 114 116 116 116 Incumbent party did not control Congress. Incumbent party not re-elected. The nineteen completed years show an approximate normal distribution. Eleven are bull markets, three (I920, 1932 and 1940) are distinct bear-market years, and in five years the trend was flat. There a ppears to be a tendency toward a flat trend or moderate wea knes s in the first ha If. Eleven of the nineteen years showed little market change through June. Indeed, only in the three years which evolved into bear markets was the first half action predominantly on the downside. It is worthy of note that a downward bias tends to occur on two sorts of occasions, first, when the incumbent President loses the election,and, second, when the incumbent party does not control Congress. How- ever, 1972 was an exception to this latter rule and 1976, based on action to date, may well be, also. Indeed, it is interesting to note that 1976, through May, has produced the strongest uptrend. The first statistic suggests that the market may be a good forecaster of election returns. In none of the six years when the incumbent lost the election was the market up more than 5 in the first half. President Ford may thus be able to rcad some comfort into the market strength shown to date. The most consistent fact about election year markets, though, is a deftmte tendency toward a strong second half. Indeed, as the table shows, in 16 of the 19 completed years, the average – – 'price'feir December was'nigher- than the-averagepricE'- for June .Evenintwoofth-e-threebear 'matkets – 1932 and 1940, the market rallied in the second half from the June lows. In 1912 the June-December difference was miniscule, and the market spent most of the second half in hlgher territory. Only in 1920 and 1948 was there a distinct decline from June to December. Fitting all this into the 1976 pattern, we have argued in the past the case for anticipating short-term market weakness, but we have asserted that we expect it to be relatlvely minor in scope. The election-year pattern that has existed in the past would be entirely consistent wlth a minor decline from now into the early summer, followed by a basing-out process and higher prices later on in the year. Dow-Jones Industrials (1200 p.m.) 969.47 ANTHONYW. TABELL S & P Composlte (I200 p.m.) 99.63 DELAFIELD, HARVEY, TABELL Cumulative Index (6/3/76) 486.87 AWT/jb No statement Of expression of apullon or ony other matter herein contOlned IS, or IS to be deemed to be, directly or indirectly, on offer or the sol,cltotlon of ,on offer to buy or sell any secvnty referred 10 or mentioned The molter IS presented merely for the corwerlence of the subscriber While Ne believe the sources of our Informo- tlon to be relloble, we In no way represent or guarantee the occuracy thereof nor of the stotements mude herem Any action to be faken by the subSCriber should be bosed on hiS own mllestlgahon and information Janney Montgomery Scott, Inc, as a corporation, and ITS officers or employees, may now hove, or may lOfer toke, poltlons or trades In respect to any securities mentioned In thIS or ony future Issue, and such pOSition moy be different from any VieNS now or hereafter eo.press(!d In thIS or any other Issue Janney Montgomery Scolt, Inc, which IS registered With the SEC as on Investment adVisor, may give adVice to Its mvestment adVisory and other customers Independently of any statements mode In thiS or In any other Issue Further information on any security mcnhoned herein IS available on request

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