OCR Text |
Show SIqgIi Martiet Load? The remarkable performance perfor-mance of the stock market in the initial month of the nation's na-tion's Bicentennial year has caused economists and business analysts to wonder what inferences should be drawn from this surprising development . FROM THE very first trad session of the new year, the stock market took on an entirely new image of robust vitality- This was. of course, sharply different from the half-hearted behavior seen in the second half of 1975. In fact, the upward impetus which ruled the first two " trading days of 1976 was o( such magnitude that the Dow Jones Industrial Average was thrust past two levels which had been regarded as meaningful resistance points by many followers of the stock market. MOST OF the remaining market sessions m the month of January saw impatience to buy easily overcoming the emerging profit-taking moves. So, this popularly accepted barometer of stock market conditions took off in hot pursuit pur-suit of the vaunted one thousand mark and the all-time all-time record high only a whisker beyond that level. EXCEPT for periods of unusually strong or weak performance on the part of the stock market, nvsi people do not pay a great deal ol attention at-tention to the investment scene, except perhaps as a subject of passing conversation. conversa-tion. At this particular time, however, the display of strength merits more than momentary attention. Historically, His-torically, directional changes in the stock market have frequently preceded similar turnabouts in economic activity. ac-tivity. IN LATE 1974. for example, stock prices began an uptrend long before the last recession ended. Throughout the dark days of the business collapse in early 1975, stock prices continued con-tinued resolutely upward, although it was not until mid-spring that economic recovery took hold. IT IS understandable, therefore, that the subdued state of the stock market in the second half of 195 generated considerable anxiety an-xiety that the business revival might be doomed to an early end Through similar logic, the early ly76 outburst of investment invest-ment enthusiasm has spawned new hopes that the tepid betterment in business will give way to pronounced strength EVEN notable movements in the stirk market, however, do not always accurately foretell what is coming next in the world of business Manv factors can temporarily influence the market and must be included in any overall evaluation. At the present time, there are several considerations worth citing The resurgence of investment optimism, for instance, was preceded by some six months of profound uneasiness over fiscal problems at all levels of government and the consequent con-sequent state of disarray in the market for tax-exempt bonds. AND THE downward slide of interest rates made corporate cor-porate securities less disadvantaged disad-vantaged on the basis of comparative investment returns. re-turns. Also, political and financial problems in a number of foreign nations may well have accentuated the flow of investment funds to our shores. The Research Department of Hanson's Reports continues to view the economic prospects pros-pects for 1976 with guarded optimism, carefully weighing some possible disturbing factors. THE COUNTRY . confronted with a '.iK strike dangers as a ns, J major unions negr.ta,t',, labor agreetTkTits " ' It must be noted. t, .. feisty labor leaders ma J I rest from managf-mer' ' . ' ficiently lush wage irK-t." ! I to start up new (ears tr.."" renewal of inflation 1 ALSO, it mav nxji ... before the economic m ... J ' and the Treasury's d. . brake the shppjge in rates and bend thrrr f upward All in ail, fai- ,. Reports is not chan " generally favorable potion po-tion for 1976 as a although cauhon is d- . ed it |