Based on the way it's usually been over the decades, what you see in the stock market today is an indication of what the economy will be in about six months. The market is not a thermometer, it's a barometer.
However, the stock market is uneven to an unusual degree. A number of share prices have been hit hard, but many others are near their highs, a mixture that throws a haze over the picture down the road.
In the financial world, for example, the share prices of securities firms are strong but those of banks and savings and loans are weak.
Some manufacturing businesses are doing well, despite the recession, but retailing firms are going through rather rough times. Builders are finding things difficult, as are publishers and airlines, but some real estate trusts and insurance companies have no share-price complaints.
We present here several of 1991's strong performers and some of the weak ones. This is not necessarily a preview of their 1992 showings, but it may be helpful when considering them for the future.
The share price of the Geico Corp. of Chevy Chase is near its all-time high, trading above 190. Geico is a diversified insurance company. The USF&G Corp. of Baltimore, also a diversified insurer, is still operating in deficit territory and its share price remains on the floor.
Securities and investment firms are benefiting from leaner operating costs and more public interest in a variety of investments. T. Rowe Price's share price is near its peak of 38 as its earnings and dividends rise. The prices of Alex. Brown and Legg Mason have rebounded sharply this year. All three firms are headquartered in Baltimore.
Maryland's largest banking firm, MNC Financial, burdened by poor real estate loans, fell apart in late 1990; this year, the stock remained at its low level. On the other hand, Mercantile %o Bankshares, without the problem real estate loans, is near its top of 28 1/2 .
Poor property holdings and low-occupancy rates upset some companies in real estate, but Washington Real Estate Investment Trust of Bethesda again boosted its dividend and the share price recently reached a new high.
The Marriott Corp. of Bethesda, also beset by real estate woes, has struggled this year but a Maryland-based competitor in the hotel business, Manor Care of Silver Spring, is prospering as is its share price.
The shares of specialty retailers such as Kitchen Bazaar, a small Rockville-based store chain, Merry-Go-Round Enterprises of Joppa, and the Hechinger Co. of Landover are much lower priced these days, although earnings of Merry-Go-Round and Hechinger are positive.
The Preston Corp., a trucking business headquartered at Preston on the Eastern Shore, has been hurt severely by the recession. The share price, under 6, is near its all-time low.
Giant Food of Landover has been hurt by the recession as well as by stepped-up competition from other food chains. Its share price has been depressed and remains so.
But McCormick & Co. of Baltimore, the manufacturer of spices and flavorings, has been unaffected by the recession and the shares are at their all-time high.