Tabell’s Market Letter – January 20, 1984

TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 9249660 January 20, 1984 1984, as the press will shortly make us excruciatingly aware, is a presidential year, We 'haverackethe;behavio.r ofthe'stockarket-in-suchyearsback'1othgeginning qf-the.century, and the results are shown below. The table shows each election year since 1900, the president elected, and his party, followed by the average price of the S 8. P 500 for each month during the year expressed as a percentage of the previous December's close (i.e., 110 means the market was up 10; 90 means jt was down 10). .- Year T9llO Wf 99R Jman Feb Ilr3' Mmar ol Jun –gg -J-uglg Ag Sep 97 1904 Roosevelt R 102 99 99 101 99 99 103 107 112 1908 Taft R 105 100 105 111 117 117 123 126 125 1912 Wilson D 100 99 102 106 105 105 106 109 109 1916 Wilson D 99 98 97 96 98 99 98 99 102 1920 Harding R 99 91 97 9 91 89 89 86 89 1924 Coolidge R 103 104 102 100 99 101 101 113 112 1928 Hoover R 99 98 103 110 113 108 108 112 120 1932 Roosevelt D 103 101 102 76 66 59 63 89 102 1936 Roosevelt D 102 108 112 112 104 108 116 118 120 1940 Roosevelt D 99 98 97 98 85 76 80 82 86 1944 Roosevelt D 102 101 105 101 105 109 112 110 108 1948 Truman D 97 92 94 101 106 110 108 104 103 1952 Eisenhower R 102 100 100 100 100 102 105 106 104 lJlji-&-Eis!!nho.l\'.,—R 97 98 104 ,105 103 102 107 106 103 1960' – KimilEldy D 99 98 92 9 92 96 '93 '94 92 1964 Johnson D 102 103 105 107 109 108 111 110 111 1968 Nixon R 98 94 92 99 101 104 104 101 105 1972 Nixon R 101 103 105 107 105 106 105 109 107 1976 Carter D 107 112 112 113 112 113 116 115 117 1980 Reagan R 103 107 97 95 100 106 111 114 117 lncumbent party did not control Congress. Incumbent party not re-elected Oct 100 118 126 109 105 89 110 123 88 126 87 111 106 104 102 91 113 108 107 113 121 mNov Drnec 125 126 134 138 108 103 107 103 85 77 115 119 131 132 87 82 130 128 88 85 110 115 100 99 105 109 10,O0L…,…, 93 97 115 112 109 110 113 115 112 116 126 124 Presidential election years show a mildly bullish bias. Only three of them (1920, 1932, and 1940) are distinct bear markets. Thirteen of the 21 years are bull markets, and five showed a flat trend. Another noticable tendency appears to be flatness or moderate weakness in the first half. Twelve of the 21 years showed little market change through June. It is worthy of note that a downward bias tends to occur on two sorts of occasions. The first is when the incumbent party does not control Congress, which we know currently to be the case. The second is when the in- cumbent president loses the election. Only in 1976, when that occurred, was the market up more than 6 in the first half. Thus, the direction of the market over the next few months may be a good indicator of Mr. Reagan's chances in November. An interesting figure to watch will be the average price in April. There have been eight election years in this century where that price was lower or the same as the previous year end. In six of those eight years the incumbent president was replaced. , Also interesting is the distinct tendency toward a strong second half In 17 of the 21 years the average price for December was higher than the average price for June. This appears to be true regardless of the election results and even in bear-market years where, in the past, the market has rallied in the second half from the June lows. In only two years, 1920 and 1948, were there significant declines between June and December. The election year pattern, therefore, calls for little change in the market during. the first half, although some firmness is likely if Mr. Reagan is to be reelected. This history of election years, however, suggests that the second half of 1984 should produce a rallying phase. AWTrs Dow Jones Industrials 0200 p.m.) 1261. 51 S & P Composite (1200 p.m.) 167.01 Cumulative Index (/19/84) 2082.58 ANTHONY W. TAB ELL DELAFIELD, HARVEY, TABELL INC. No statement or e,pres510n 01 opinion or any other mailer herein contained IS, or IS to be deemed to be, directly or mdlrec1Iy, an offer or the soliCitation of an offer to buy or sell any security referred toor mentioned Tho mailer IS presented merely forthe convenience 01 the subscriber While we believe the sources of our information to berehable, weln no way represent or guarantee 1M accuracy tMreo! nor of the statements made herein Any action to be taken by the subscriber Should be based on hiS own investigation and mtorma\lon Delafield, Harvey, Tabell Inc as a corporation an(! Its ollicers or employees, may now have, or may later lae, positions or trades In respect to any securities mentioned m thiS or any future ISSue, an(! such POSition may be different from any views now or herealler e)lpressed In thiS Of any other Issue Delafield, Harvey, Taboll Inc whiCh IS reglstere(! with Ihe SEC as an Investment adVisor, may give adVIce to lIs Investment a(!VISOry and other customers Independenlly of any statements made In this or In any other Issue FUrther Informa\lon on any secufliy mentioned herem IS available on request