Basing investment decisions on the Super Bowl outcome makes little more sense than avoiding black cats or cracks in the sidewalk. But that doesn't stop market analysts from crunching the data to see how stocks fared after previous contests and finding patterns.
Analysts note that Super Bowl LIX on Sunday between the Philadelphia Eagles, of the National Football Conference, and the Kansas City Chiefs, representing the American Football Conference, will break the AFC and NFC's 29-29 tie — and they parse what those past results could portend for S&P 500 performance.
As with data in general, there's more than one way to analyze the numbers.
As the National Association of Plan Advisors noted in a blog post by Nevin E. Adams, there are notable failures of the "Super Bowl Indicator," which suggests, based on past performance, that the S&P 500 rises for the year when a team from the old National Foodball League, now the NFC, wins, and declines when a competitor from the old American Football League, now the AFC, prevails.
Ryan Detrick, chief market strategist at Carson Group, made a similar point.
"Of course, this is totally random, but it turns out that when looking at the previous 58 Super Bowls, stocks do better when an NFC team wins the big game," he said in a column.
The S&P 500 gained 10% on average during the full year when an NFC team has won versus 8.1% when an AFC team wins, Detrick noted. (It's up 9.1% a year on average.)
"So, it is clear-cut that investors want the Eagles to ground the Chiefs and win, right? Maybe not," he added, explaining that stocks have gained over the full year 12 of the past 13 times that an AFC team won the championship, going back 21 years.
The only time that stocks were lower, down only 0.7%, was in 2015, when the AFC's New England Patriots won.
Detrick then got pretty granular with his stats. The Chiefs have won all four times they played in the Super Bowl, with stocks gaining 15.9% on average in those years. The Eagles won the championship only once, in 2018, and stocks fell about 6%, the strategist said. He also found that stocks perform better after bigger victories — while also noting that "nearly everything I’m saying here isn’t in any way, shape or form related to what stocks actually do."
Detrick didn't recommend rooting for either the Eagles or the Chiefs.
"Personally, I can’t stand either team," he said, "but I guess I’ll just say when Philly wins a Super Bowl or World Series really bad things tend to happen."
A chart he posted showed that, going back to 1910, Philadelphia team championship victories came in the same years as a 25% bear market, the 1929 stock market crash and the Great Depression, among other tough financial events.
Meanwhile, Bespoke Investment Group offered its own lengthy analysis.
"Unfortunately, this year’s game isn’t between the 49ers and the Steelers. Both teams have won at least five Super Bowls over the years, and the S&P 500 has traded higher for the remainder of the year after every one of their wins," the firm said.
"It should go without saying that the score of the game or even who wins has zero impact on how the stock market will perform for the remainder of the year, but some of these online betting platforms have some even crazier bets people can make," according to the firm.
NAPA's Adams cited another theory postulating that the Super Bowl victor can be predicted based on whether the Dow Jones Industrial Average rises from late November until game day. In that case, goes the theory, "the team whose full name appears later in the alphabet will win. Some people have too much time on their hands."
Photo: AJ Mast/AP
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