The New England Patriots take on the Philadelphia Eagles in Super Bowl LII. Wells Fargo analysts are putting their bets on the Patriots, but what could a Patriots win mean for markets?
LPL reports that a Super Bowl appearance by the New England Patriots has not historically benefited markets.
In a recent commentary piece, Ryan Detrick, senior market strategist for LPL Financial, examines what happens to the S&P 500 based on which conference wins.
The Super Bowl indicator suggests that stocks rise for the full year when the Super Bowl winner comes from the original National Football League, but when an original American Football League team wins, stocks fall.
The Patriots represent the American Football Conference (AFC), while the Eagles are part of the National Football Conference (NFC).
“[T]he 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,” Detrick writes.
Detrick admits that this indicator has no connection to the stock market.
Detrick also examines the average gain for the S&P 500 when the NFC has won versus the AFC, and finds that there was 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.
Detrick reports that the numbers actually get worse when the Patriots are involved.
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,” Detrick said in a statement. “Tom might be terrific, but maybe not in all cases.”
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