Tabell’s Market Letter – August 05, 1988

Tabell’s Market Letter – August 05, 1988

Tabell's Market Letter - August 05, 1988
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TABELL-S MARKET LETTER 600 ALEXANDER ROAD, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (6091 987-2300 August 5, 1988 . s .ess!.s. Bush ad Dukakis prepare to square orf in November, various Sources have raised the question -of whaf the -election or- eitlier gentlemen rrilght -mean'for the slock- marker Wehave.'-therefore—– — I updated the table below, which last appeared here eight years ago. The table shows the percentage change in the stock market for one. two. thre-e. and six-month periods and one. two. three, and four-year periods following the October close of each Presidential election year since 1900. Summarized at the bottom of the table are a number of averages. The first shows the average percentage change in the market for all years since 1897 over the periods in question. The second shows the average change for the various periods following election years. Following this are averages for perioda follOwing election years which elected (a) a Republican, and (b) a Democrat; and periods following election years in which (a) the incumbent party was returned to power, and (b) a new party was Installed in power. PER C E N T C HAN G E o V E R -Y-e-a-r 1900 President -M-c-k-i-n-l-e-y- P–t-y R -1–K-o-n-t-h 12.79 -2–M-o-n-t-h 19.77 -3–K-o-n-t-h 13.16 -6–K-o-n-t-h 28.39 -1–Y-e-a-r 9.16 -2–Y-e-a-r 11.89 -3–Y-e-a-r -4–Y-e-a-r -23.56 6.76 1904 Roosevelt R 14.26 10,44 13,17 20.70 32.90 47. 41 -8,46 30.94 1908 Taft R 5.78 4.39 1.89 6.98 20.04 2.71 -8.17 9,91 1912 Wilson 0 1. 36 -3.13 -7.71 -13.42 -13.68 -21. 27 44.50 57.42 1916 Wilson 0 1.30 -9.19 -8.78 -10,88 -28.78 -18.26 13 .68 -18,79 1920 Harding R -10.49 -15.30 -10.38 -7.19 -13.82 13 .14 421 22.50 1924 Coolidge R 7.03 15.81 18.41 15.33 50.41 44.51 74 .64 142,32 1928 Hoover R 16.35 18.97 25.92 26.62 8.47 -27.29 -58.19 -75.45 1932 Roosevelt 0 -8.97 -3.18 -1.62 25.46 42.42 50.82 125.75 186.25 1936 Roosevelt 0 3.40 1.53 4.83 -1.65 -22.02 -14.37 -14,28 -24.03 1940 Roosevelt 0 -2.68 -2.59 -7.79 -14.17 -12.47 -15.26 2.72 8,86 -gn — ! Roosevelt 0 0 12.91 27.35 15.44 23.65 28.72 ,..7.67 0,-49 19.29 3909 42.74 m !h – 1960 Kennedy 0 2.91 6.12 -r 11.69 16. -; 21.29 -a0-61l95-7823 13.21 3475 20.95 1.62 30.13 50.44 1964 Johnson 0 0.27 0.12 3.41 5.64 10.05 -7.56 0.76 9.08 1968 Nixon R 3.43 -0.91 -0.67 -0.23 -10.12 -20.66 -11. 91 0.33 1972 Nixon R 6.56 6.75 4.55 -3.57 0.11 -30.38 -12.50 0.98 1976 Carter 0 -1.84 4.12 -1.09 -3.94 -15.19 -17 .87 -15.47 -4.19 1980 Reagan R 7.45 4.27 2.46 7.92 -7.78 7.27 32.53 30.60 1984 Reagan R -1.53 0.35 6.58 4.20 13 .83 55.53 65,11 76.75 A–V-E-R-A-G-E-S All Years 0.71 2.03 2.99 4.37 6.67 13.78 19,18 26.04 Election Years 2.39 3.13 3.43 5.16 4.86 6.40 18.54 30.91 Republican Elected 5.46 6.42 6.88 8.69 8.13 12.34 13.12 28.73 Democrat Elected -1.29 -0.82 -0.12 0.92 0.94 -0.74 25.05 33.65 Incumb. Reelected 3.12 3.74 4.76 4.42 7.10 6.54 11.75 19,46 New party 1.33 2.24 1.50 6.22 1.64 6.19 28.35 47.59 1 – —- There eXIsts a conventional wisdom which asserts that the assession of a Republican president is bullish, and that of a Democrat bearish, for the short term. while the oPPosite is true for the long term. This theory probably first arose following 1928 – 1932, when the Hoover administration began with a burst of market strength and ended with the worst four-year reeord of the century. while the first Roosevelt administration. ushered in with a sharp one-month decline. produced the best stock-market rise on record. There does. however. appear to be a Pavlovian tendency for the market to rise In November when a Republican president has been elected. The average 5.46 one-month rise in the 12 years which ushered in GOP occupancy of the White House is quite spectacular when compared to the average 0.71 for all 92 years under study. Indeed. for all periods up to 6 months. the performance in Republican-victory election years has been at least twice as gOOd as the normal case. Beyond six months. the Republican-vs.-Democrat statistics tend to lose significance. The long-term record for the Democrats is. indeed, marginally better. but the difference has been reduced in recent years by two fairly respectable performances in the two Reagan administrations. Indeed analysiS of longer periods leads one to question the existence of any election-year correlation. For example, the period 1948 – 1964 was one of a generally rising stock market, while the 1964 – 1980 period was relatively flat. Each of the two eras saw two Republican and two Democratic administrations. In the former period, the market advanced regardless of the presidential party. and, during the latter. did nothing under both Democratic and Republican preSidencies. Over three and four-year periods. the record seems to show that more important than the party elected is the question of whether a new party has been placed in power. The average four-year performance during those administrations where the White House changed hands has been almost twice as good as the average for all years. ANTHONY W. TABELL AWTebh DELAFIELD, HARVEY, TAB ELL INC. Dow Jones lndustnals (1200) 2114.33 S P 500 (1200) 271.06 CumUlative Index (8/4/88) 3916.27 No statement or expression of opinion or any other matter herein contained IS, or IS to be deemed to be, dlreclly or Indirectly, an offer or the soliCitatIOn of an offer to buy or sell any security referred 10 or mentioned The matter Is presented merely for the convenience of the subSCriber While we beheve the sources of our information to be reliable, we In no way represent or guarantee the accuracy thereof nor ollhe statements made herein Any acllon to be taken by the subSCriber should be based on hiS own investigation and infOrmation Delafield, Harvey, Tabelllnc, as a corporal!On and Its officers or employees, may now have, or may later take, posrtrons or trades In respect to any secunffes mentioned In thiS or any future ISSue, and such poslllOn may be different Irom any views nowor hereafter expressed In thiS or any other Issue Delafield, Harvey, Tabelllnc, which IS registered With the SEC as an Investment adVisor, mFlyglve adVice to ItS Investment adVISOry and other customers Independenlly of any statements made In thiS or In any other Issue Further Information on any securrty mentioned herem IS available on request

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