If you are bullish on stocks, best hope the NFC's L.A. Rams pummel Joe Burrow's Cincinnati Bengals.
That is, of course you are a big believer in the Super Bowl Indicator.
The often bantered about Super Bowl Indicator suggests that stocks rise for the full year when the Super Bowl winner has come from the NFC, but when an AFC team wins it falls. Of course this is insane in principle as stocks move up and down based on expectations for the future earnings of their underlying companies (see Meta post earnings meltdown).
But as Ryan Detrick, LPL Financial's chief market strategist (aka the QB of his team), points out, the stats don’t lie on the predictive powers of the Super Bowl Indicator.
Detrick’s research shows that the S&P 500 has performed better, and posted positive gains with greater frequency, over the past 55 Super Bowl games when NFC teams have won. An NFC winner has produced a positive year for the S&P 500 79% of the time, while the benchmark index has been up only 65% of the time when the winner came from the AFC.
The long-time strategist warns the Super Bowl Indicator — first created by New York Times sportswriter Leonard Koppett in 1978 — is far from foolproof. For instance, stocks have done quite well amid recent AFC Super Bowl wins (see chart above).
“Interestingly, there have been 55 Super Bowl winners, yet only 20 teams account for those wins,” said Ryan Detrick. “Of course, we’d never suggest investing based on this, but history would say that lately AFC teams have been quite good for stocks, but I’m also a Bengals fan, so I’m clearly biased.”
That said, go Rams.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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