Markets rattled investors this week, as a ferocious 40-year high inflation print rocked stocks and bonds on Thursday — only to be thrown a geopolitical curve ball Friday afternoon on suggestions of an imminent confrontation between Russia and the Ukraine. At least investors can take solace in the hope that Sunday night on the gridiron brings a much needed respite. And according to one Wall Street firm, the fate of Super Bowl LVI may even inform investors about their prospects for potential returns in the stock market this year.
S&P Global Market Intelligence recently plumbed the depths of its S&P Capital IQ database — looking at the outcomes of the prior 55 Super Bowl matches and compared them with the corresponding S&P 500 (^GSPC) annual returns for that calendar year.
Their findings are eye-opening, but there’s a huge caveat: This study is admittedly arbitrary and was done tongue-in-cheek — so no pros will actually be trading on these results. In other words, this is for entertainment purposes only. Enjoy.
Run up the score, bang the tape
The study finds that when there’s an action-packed offensive game with a combined score of 46 points or more, stocks are up 13.7% those years. That’s compared to only 9.9% gains when the score is under 46.
Maybe a high-scoring Super Bowl outcome is emblematic of a risk-on mood that’s putting a bid on stocks. Consider the January Effect — that a winning first month of the year for stocks tends to portend a winning year. If stocks are up into the Super Bowl, we might expect this bullish mood to continue into year-end, rewarding investors.
Unfortunately, this year, the S&P 500 was down over 5% in January due to market uncertainty over fears the Federal Reserve may have to tighten aggressively to reign in market excesses. This could obviously make for a defensive, low-scoring game Sunday.
Markets favor the favored
Investors may also care if the oddsmakers get the winning team right (no word on the spread). Markets hate uncertainty — so goes the saying. If the Vegas bookies can’t even get the winning team correct, there may be a dark cloud over the entire betting world — including stocks. DraftKings (DKNG) sees the Rams winning this year. If they do, the S&P 500 might return a bit more than if the Bengals take the trophy — 13.7% versus 9.9%.
Bonus: If the game goes into overtime, that’s good for a 15.9% average return.
Goin’ back to Cali
Only 10 states have hosted the Super Bowl, and only three of those have hosted it more than 10 times — Florida, California and Louisiana. The Golden State sits in the middle of these two with a 15.8% average return, and it’s fourth overall in the ranking. Michigan claims the top spot — averaging 21.5% returns in the two times it has hosted the Super Bowl.
Only Arizona has a negative return for the set, seeing stocks down 4.2% on average those three years. However, in 1996 the market was up 23% after the Cowboys defeated the Steelers at Sun Devil Stadium. It was the unfortunate timing of Super Bowl XLII amid the Global Financial Crisis that skews Arizona’s average, as stocks ended 2008 down 37%.
Locals rule
This stat is a bit tricky — even for the current exercise into the absurd. In years where the designated home team wins the big game, stocks yield nearly 17% on average versus only 8.9% for the road team. But, even though the Rams are playing at their home field, SoFi Stadium, it’s the Bengals who are the designated home team. That’s because the NFL designates the AFC as the home team this year.
Good luck with this one.
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Jared Blikre is an anchor and reporter focused on the markets on Yahoo Finance Live. Follow him @SPYJared.
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