Tabell’s Market Letter – April 05, 1991
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TABELL-S MARKET LETTER 600 ALEXANDER ROAD, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 , April 5, 1991 It can hardly be news to anyone that the stock market has been moving upward sharply since the anuary 15. invasion ..-of Jraq ….!What .. is .. unusual..,.about this .. strength, .though is thE diersity .. among various market sectors which can 'be illustrah,d in the table at left, showing the January 14-April 4 percentage change in ten representative averages. The table raises some interesting pOints. First is the Average , Change amazing performance of the OTC Industrials and, to a lesser degree, the Value Line index, suggesting that the renaissance of OJ Industrial OJ Transport OJ Utilities S&P Indust. SOP 500 S&P Financial ASE Index OTC Indust. Value Line Wilshire 5000 17.74\ 24.19 7.17\ 22.54\ 21. 53\ 37.98\ 23.05\ 45.34 28.46 23.66\ the small stock may, after 10, these many years, finally be upon us. Interesting also is the sharp recovery demonstrated by the financial sector which, as we shall see, has for some years been the one of the worst performing market areas. Finally, we have the factor, noted In this space in the past, of the significant outperformance Of the Dow by the S & P Industrials and the 500-Stock Composite. Varying performance among the averages. is, however, not 8 new phenomenon. The following table traces 3 112 years of history for the same ten averages. All, of course, reached peaks in August 1987, prior to the October 1987 market crash. They all then recovered, slowly at first, then more quickly, reaching highs in October, 1989. In all cases except the OTC and Value Line, 1987 highs were modestly exceeded at that peint. Average Aug 87 Oct 89 Jul 90 Change Apr 91 Change \ Change High High High 1989-1990 High 1997-0ate 1989/90-0ate OJ Industrial 2722.42 2791. 41 2999.75 6.95\ 2973.271 9.211 – 0.681 OJ Transport 1101.16 1518.49 1208.76 -25.621 1166.26\ 5.91\ -23.201 – -OJ Utili ties SOP Indust. S&'–500 227.83' 236.23 212.09 -11. 381 216.30 5.061 – 8.44\ 393,1 410.49 437.37 6. 7tl.t'l9.4J.t.41.1t2,-651 336.77 359.80 368.95 2.481- – 379.77 –12.77\ 2.9n ….,,—— SOP Financial 32.56 35.24 29.20 -20.68 30.37 – 6.73\ -13 .841 ASE Index 365.01 397.03 365.56 – 8.601 365.11 0.031 – 8.041 OTC lndust. 484.50 472.40 510.60 7.481 563. 91 16.39\ 10.44\ Value Line 289.02 278.98 250.56 -11. 341 241.92 -16.301 -Wilshire 5000 3299.44 3523.47 3516.32 0.151 3634.61 10.11\ January, 1987 January, 1990 I March, 1991 -13.28\ 3.15\ It was in the fall of 1989 that divergence began to manifest itself. Most of us have the impression that the bull market continued through last summer. This was indeed true for the popular averages. The Dow and both S & P averages moved above their October 1989 peaks last July. However, many areas totally failed to participate in that last stage of the bull market. The OJ Transports, at last summers high, were 25 below their October figures, and the S & P Financials were 20 lower. Neither the Utilities, AMEX, Value Line or Wilshire were able to post new peaks. In any case, following the July-October downswing, the market has, once again, recovered, as the final column of the table shows. That recovery, in a number of cnses, has carried to new aU-time peaks. The S & P Industrial and 500 are now both above their 1989-90 highs as are the OTC Industrials and the Wilshire 5000. The other averages, though, remain well below their peaks of one to two years ago. The Transports are well below their 1989 figure, and the financial sector, despite its recent outstanding performance, is also below 18-month-ago levels. Recent improvement has also failed to bring the Value Line anywhere near its 1989 peak. Finally, it is worth noting that the Utility, Financial, and Value Line Indicators still remain below their 1987 highs. — It is also interesting that all the averages in the table posted new highs this week except for the Dow Jones Industrials and Transports. The S & P 500 first moved above its July 1990 high on February 13.and has been posting successive new .. peaksever since. The Dow of course. remains well below that high. This is a reversal of action seen in the first half of 1990, when the Dow reached a bull-market high on January 2, a peak which was not confirmed by the S & P 500 until May 29. New highs in the S & P unaccompanied by similar action in the Dow are not all that rare, however. In August 1979, the S & P reached a new high for the move from March, 1978. It continued to move ahead. on a regular basis. for a year without confirming new highs for the Dow. New peak levels for the DJIA were not reached until July 17, 1980, an interval of 232 trading days. ANTHONY W. TABELL DELAFIELD, HARVEY, TAB ELL INC. Dow Jones Industrials (12 00) S & P 500 (1200) Cumulative Index (4/4/91) AWTjb 2903.96 380.72 6021.36 \ \ \ No statement or expression of opinIOn or any other matter herein contaIned IS, or IS to be deemed to be, directly or Indirectly, an offer or the soliCitation of an oHer to buy or sell any secUrity referred to Of mentioned The matter IS presented merely for the convenience of the subSCriber While we beheve the sources of our information to be rehable, we In no way represent or guarantee the accuracy thereof nor 01 the statements made herein Any action to be taken by the subscnber should be based on hiS own Investigation and information Delafield, Harvey, Tabelllnc, as a corporation and I\S officers or employees, may now have, or may laler lake, pOSitions or trades In respect to any securlbes mentioned tn thiS or any future Issue, and such position may be different from any views now or hereafter expressed In thiS or any other Issue Delafield, Harvey, TabeU Inc, which IS registered With the SEC as an Investment adVisor, may give adVice to Its Investment adVISOry and other customers Independently of any statements made In thiS or In any other Issue Further InformaMn on any security mentioned herein IS available on request