Monday , 26 February 2024

Can the Super Bowl Winner Predict How Stocks Will Do This Year?

Some investors believe… the outcome of the Super Bowl could determine which direction the stock market will head. The thesis behind the Super Bowl stock indicator is this: If an AFC team [this year its the Kansas City Chiefs] wins the Super Bowl, a stock market decline or bear market can be expected by year-end. Conversely, if an NFC team [this year its the San Francisco 49ers] wins, it’s all roses ahead.

This post has been severely edited and abridged from the original article by Chris MacDonald for the sake of clarity and brevity to provide you with a fast and easy read.

Investors can rightly assume there have been mixed results using this methodology (if you can call it that). Let’s dive into what investors may want to know about the so-called “Super Bowl indicator” and what it could mean for the market this year.

The indicator was largely accurate before the dot-com era with a success rate of over 90% but…from 2004 to 2023, the indicator has only been correct 30% of the time]… so maybe some contrarian investors will now be looking to make a bet the other way on the markets this year — go Chiefs (?).

The outcome of the Super Bowl holds little relevance to the typical market drivers like economic growth, corporate earnings and consumer confidence…thus, this year’s outcome will, as always, have absolutely zero predictive value for what level the stock market ends the year. [Bottom line:] the Super Bowl stock indicator, while a fun way to place a wager on this year’s market performance, should be used for just that — entertainment purposes only.

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