If the stock market is going to do well in the first year of George Bush's presidency, it will have to give him a warmer welcome than it has accorded the past several newcomers to the White House.
In 1969, when President Nixon took office, the market dropped about 14 percent.After his successor, Gerald Ford, took office in August 1974, the Dow Jones industrial average went into a 200-point swoon in less than two months.
Jimmy Carter, in 1977, was greeted with a 10-percent decline. Even the arrival of Ronald Reagan, with his immense popularity on Wall Street, was followed by a 7 percent loss in 1981.
It is a generally accepted view in the financial world that this tendency is more than coincidence.
A change of command presumably begets uncertainty among investors, who pull back until they become familiar with a new administration.
Furthermore, new presidents often use their early months in office to take tough measures that would be politically difficult or awkward at any other time.
And, as it happens, 1969, 1974 and 1981-though not 1977-were recession years.
As 1989 begins, the economy is growing, with few signs of a business slump any time soon. Stock prices have rallied in the weeks leading up to Bush's inaguration, aided by hopes that he would bring a new touch to dealing with some old problems.
Nevertheless, Wall Streeters are watching closely to see if past patterns repeat themselves.
Said Suresh Bhirud, chief investment strategist at Oppenheimer & Co., "1989 is likely to be a very difficult year for stocks and bonds.
"The U.S. budget deficit is no longer improving. The U.S. has become a net debtor, currently owing $400 billion to the rest of the world.
"Capacity utilization is very tight in the manufacturing sector, and labor shortages are beginning to surface. And there is too much debt in all sectors of the economy."
Stocks shrugged off such worries in the past week. In fact, the week's best showing came on Wednesday, in the face of a government report that showed a larger-than-expected increase in the nation's trade deficit.
The Dow Jones average of 30 industrials closed Friday at 2,235.36, up 9.29 from the week before.