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Stock Market Super Bowl Indicator

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  1. bigbear0083

    bigbear0083 Content Manager
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    Tom Terrific? The Super Bowl Indicator Might Disagree

    The Super Bowl indicator suggests that stocks rise for the full year when the Super Bowl winner comes from the original National Football League (now the NFC), but when an original American Football League (now the AFC) team wins, stocks fall. We would be the first to admit that this indicator has no connection to the stock market, but the data doesn’t lie—the S&P 500 Index has performed better, and posted positive gains with greater frequency, over the past 51 Super Bowl games when NFC teams have won.

    A simpler way to look at the Super Bowl indicator is to look at the average gain for the S&P 500 when the NFC has won versus the AFC—and ignore the history of the franchises. This similar set of criteria has produced an average price return of 10.8% when an NFC team has won, compared with a return of 5.8% with an AFC winner. An NFC winner has produced a positive year 82% of the time, while the S&P 500 has been up only 63% of the time when the winner came from the AFC.

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    Would you believe the numbers actually get worse when the Patriots are involved? That’s right; the S&P 500 has only gained 3.1% on average in years when the Patriots play in the big game, but things get even worse if they win. “Pats fans might be ecstatic that Tom Brady is starting in a record-breaking eighth Super Bowl, but market bulls don’t want to see them win, as stocks are up only 1.5% for the year on average after a victory versus up 5.1% if they lose,” said Ryan Detrick, Senior Market Strategist. “Tom might be terrific, but maybe not in all cases.”

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    We would like to reiterate that this is in no way relevant to investors, but it sure is more fun to talk about the Super Bowl and stock market returns than politics this Sunday evening. We hope everyone has a great Super Sunday and wish both the Eagles and Pats luck!

    FULL DISCLOSURE – LPL Research has an office in Boston and we have many Patriots fans, but the author of this piece sure isn’t one.
     
  2. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    How is that overall Belichick/Brady Era negative? The market has been up since it started.
     
  3. bigbear0083

    bigbear0083 Content Manager
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    I just checked the #'s and it looks correct on my end.

    You need to exclude the years 1986 and 1997 from that table. The Belichick/Brady era starts counting from 2002 in that table.

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    anotherdevilsadvocate likes this.
  4. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    I see, my mistake. I thought the table was only talking about Brady and the Pats because I didn't look at the years column.
     
  5. bigbear0083

    bigbear0083 Content Manager
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    49ers Or Chiefs?

    The Super Bowl Indicator suggests stocks rise for the full year when the Super Bowl winner has come from the original National Football League (now the NFC), but when an original American Football League (now the AFC) team has won, stocks have fallen. We would be the first to admit that this indicator has no connection to the stock market, but “data don’t lie”: The S&P 500 Index has performed better, and posted positive gains with greater frequency, over the past 53 Super Bowl games when NFC teams have won. Of course, it doesn’t always work, as stocks did great last year even though the dreaded Patriots (from the AFC) won the Super Bowl.

    A simpler way to look at the Super Bowl indicator is to look at the average gain for the S&P 500 when the NFC has won versus the AFC—and ignore the history of the franchises. As shown in the LPL Chart of the Day, this similar set of criteria has produced an average price return of 10.2% when an NFC team has won, compared with a return of 6.8% with an AFC winner. An NFC winner has produced a positive year 79% of the time, while the S&P 500 has been up only 64% of the time when the winner came from the AFC.

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    The 49ers have won the Super Bowl five times, putting them just behind the six that the Patriots and Steelers have won. The Chiefs, meanwhile, have won the Super Bowl only once, exactly 50 years ago.

    The year the Chiefs won the Super Bowl (1970), the S&P 500 was virtually flat. Meanwhile, we’ve seen some impressive market returns the years the 49ers made it to the big game. In fact, the S&P 500 has averaged nearly 21% in the six years they made it to the final game, and 19% in the five years they won.

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    “There have been 53 Super Bowl winners, yet only 20 teams account for those wins,” said LPL Financial Senior Market Strategist Ryan Detrick. “And wouldn’t you know it, the 49ers have recorded the third-best market return out of those 20 teams when they win.”

    Here’s a breakdown of the 20 Super Bowl winners and how the S&P 500 has done following their victories.

    [​IMG]

    LPL Research would like to reiterate that in no way shape or form do we recommend investing based on this data, but those of us outside of New England can all agree we’re glad the Patriots aren’t in the game! Have a great Super Bowl weekend everyone.
     

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