Is the Super Bowl a Leading Indicator for Stock Market Performance?
As the Super Bowl approaches, sports fans and investors alike are eagerly awaiting the outcome of the championship game. But could the result of the Super Bowl actually have an impact on the stock market?
According to one firm, there may be a historical trend that suggests a correlation between Super Bowl victories and stock market performance. Bespoke Investment, a research and investment firm, analyzed past Super Bowl outcomes and their subsequent effects on the market.
Their findings indicate that a victory for the San Francisco 49ers, who have won the Super Bowl five times, has historically been better for the stock market. In fact, in every instance that the 49ers emerged as champions, the market was higher for the remainder of the year. On average, the market saw a gain of 20.2% for the rest of the year following a 49ers victory.
On the other hand, a victory for the Kansas City Chiefs, who have won the Super Bowl three times, also had a positive impact on the market, but not to the same extent as the 49ers. Following a Chiefs victory, the market was higher 67% of the time, with an average gain of 10.9%.
Interestingly, victories for the New York Giants and the Las Vegas Raiders did not bode well for the market. After their Super Bowl wins, the market saw declines of 3.4% and 4.9%, respectively, between the victory and year-end.
Bespoke also noted that high-scoring blowouts in the Super Bowl tend to result in some of the best returns for the remainder of the year. However, they cautioned that this correlation could simply be coincidental.
It’s important to consider other factors that have influenced the stock market’s performance this year. The market has been on an upward trend, with record-breaking gains in the Dow Industrials and S&P 500 indices. Positive corporate earnings and expectations of rate cuts from the Federal Reserve have contributed to this buoyancy.
While some believe that the market’s momentum will continue with support from rate cuts, others anticipate a potential downturn as the impact of previous rate hikes plays out in the economy. The Federal Reserve has not yet committed to a timeline for rate cuts, as it closely monitors inflation and growth.
Ultimately, while the correlation between Super Bowl outcomes and stock market performance is an interesting observation, it’s important to consider a wide range of factors that influence the market. Investors should not make investment decisions solely based on the outcome of a football game.
As the Super Bowl approaches, sports fans and investors alike can enjoy the excitement of the game, but should remember that the stock market is influenced by a multitude of factors beyond the football field.
