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 don’t lie—the S&P 500 Index has performed better, and posted positive gains with greater frequency, over the past 52 Super Bowl games when NFC teams have won.
Of course, it’s worth noting that this didn’t work last year when the Eagles won the Super Bowl, and the S&P 500 lost 6.2 percent in 2018.
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 10.2 percent when an NFC team has won, compared with a return of 5.8 percent with an AFC winner.
An NFC winner has produced a positive year 79 percent of the time, while the S&P 500 has been up only 63 percent of the time when the winner came from the AFC.
We would like to reiterate that we realize these calculations are in no way relevant to investors—but it sure is more fun to talk about the Super Bowl and stock market returns ahead of the biggest NFL game of the year than snowfalls and freezing temperatures.
We hope everyone has a great Super Bowl Sunday and we wish both the Rams 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.
Ryan Detrick is senior market strategist for LPL Financial.
Ryan Detrick is Chief Market Strategist for the Carson Group. Prior to working with the Carson Group, Ryan was Chief Market Strategist for LPL Financial.
