Tabell’s Market Letter – November 15, 1991

Tabell’s Market Letter – November 15, 1991

Tabell's Market Letter - November 15, 1991
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TABELL'S MARKET LETTER 5 VAUGHN DRIVE, CN 5209, PRINCETON, NEW JERSEY 08543-5209 . ,-'- MEMBEA NATIONAL ASSOCIATION OF SECURITIES DEALE AS, INC (609) 987-2300 – -r– November 15, 1991 As the market continues in the relatively flat trading range which has characterized most of 1991, It IS worth recalhng that next …. year. such 1992,-is a years back presidential elec-lion year.–OurIong-tenn readersare.awa!.tha.kwehavetracked the behavior of thestock to the beginmng of the century, and the results are shown below The table shows each election year since market in 1900. the president elected in that year and his party, followed by the average pnce of the S & P 500 for each month dunng the year expressed as a percentage of the prevIous December's close (i.e. llO means the market was up 10, 90 means it was down 10). Year President Jan Feb Mar Apr Mav Jun Jul AUQ Sep Oct Nov Dec 1900 McKinley R 101 103 104 105 100 98 98 99 97 100 108 114 1904 Roosevelt R 102 99 99 101 99 99 103 107 112 118 125 126 1908 Taft A 105 100 105 111 117 117 123 126 125 126 134 138 1912 Wilson D 100 99 102 106 105 105 106 109 109 109 108 103 1916 Wilson D 99 98 97 96 98 99 98 99 102 105 107 103 1920 Harding A 99 91 97 96 91 89 89 86 89 89 85 77 1924 Coolidge A 103 104 102 100 99 101 101 113 112 110 115 119 1928 Hoover R 99 98 103 109 113 107 108 111 119 122 130 130 1932 Roosevelt D 102 101 102 77 68 59 62 93 102 88 87 84 1936 Roosevelt D 102 108 111 111 105 109 116 118 120 126 129 127 1940 Roosevelt D 98 98 97 98 85 77 80 82 85 86 88 84 1944 Roosevelt D 102 101 104 102 104 109 111 110 108 111 110 112 1948 Truman D 97 92 93 101 106 110 107 104 103 106 100 99 1952 Eisenhower R 102 100 100 100 100 103 106 106 104 102 105 110 1956 Eisenhower R 97 98 104 106 102 102 107 107 103 102 101 102 – 1960 Kennedy 1964 Johnson D 97 93 92 93 92 96 93 94 92 90 93 95 D 102 103 105 107 108 107 111- -r09 111 113 114 –,-,-z 1968 Nixon R 99 94 92 99 101 104 104 102 105 108 109 110 1972 Nixon R 101 103 105 107 105 106 105 109 107 107 113 115 1976 Carter D 107 112 112 113 112 113 116 115 117 113 112 116 1980 Reagan R 103 107 97 95 100 106 111 114 11 7 121 126 124 1984 Reagan A 101 95 95 96 95 93 92 100 101 100 101 100 1988 Bush A 101 105 108 106 104 110 109 107 109 112 110 112 Incumbent party did not control Congre!l. Incumbent party not reelected The first POlDt of interest is that presidential election years tend to demonstrate a mildly bullish bias. Only three of them (1920. 1932, and 1940) are distmct bear markets Fourteen of the 23 years are bull markets, 1988 being a typical example, and six showed a relattvely flat trend. Despite the upward bias shown for full years, there appears to be some tendency In the direction of a flat or moderately weak market through in the year's first half Eleven of the 23 markets showed little change—Slx percent or less either way–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. of course, we know currently to be the case. The second is when the party of the incumbent president loses the election. Only an 1976. when that occurred, was the market up more than six percent in the first half. Thus the direction of the market in early 1992 may be a good indicator of (presumably) President Bush's chances In November. In thiS area. as In a number of others. the market tends to anticipate, and we would not want to argue With the thesis that the market IS a reasonably good indicator of election results, rather than the other way around. For predictIve purposes, an tnteresting figure to watch will be the average pnce for April. There have been nine election years In the century where that price was lower or the same as at the previous year end In six of those nme years, the incumbent preSident's party was replaced ID the WhIte House Also interesting -is the dIstinct tendency toward a strong second half In nineteen of the 23 years the average pncc for December was higher than the average price for June This appears to be the case regardless of the election results. and even ID bear-market years, where. in the past. the market has rallied In the second half from June lows In only two of the 23 years, 1920 and 1948. were there significant declines bet\1leen June and December. Thus, although we have become accustomed to, even bored With. a flat-to finn market in 1991 so far. the electIOn-year pattern would seem to call for Just that sort of market In the first half of 1992. (A sharp nse in November-December. of course. remains a POSSibility. and thiS would not be inconsistent WIth yet another seasonal pattern-the year-end rally) The market's pattern m early 1992 may. as noted, be a reasonably good IDdIcator of Republican chances next fall. The second half of 1992. hIstory strongly suggests. should see a rising market Guessmg the level from which that nse might take place, however. Will reqUlre a study of matters more timely than the November-1992 election ANTIIONY W TABELL DELARELD,HARVEY.TABELL Dow Jones Industrials (12 00) 3042.93 Siandard & Poors 500 (1200) 39422 CumulatIve Index (11114/91) 656773 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 offer to buy or se!! any security referred to or mentioned The matter IS presented merely for the convenience of the subscnber While we beheve the sources of our Informallon to be rehable, we In no way represent or guarantee the accuracy thereof nor 01 the statements made herein Any acllon to be taken by the subSCriber should be based on hIS own Investigation and Information Oelafleld, Harvey, Tabe!! Inc, as a corporation and Its officers or employees, may now have, or may later take, pOSitions or trades In resped to any securities mentIoned In 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, Tabelllnc, 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 information on any security mentIOned herein IS available on request

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