Patriots’ Super Bowl Win Bodes Ill for the Stock Market

By Mike Murphy, MarketWatch

That’s according to the Super Bowl Indicator, a fun but completely unscientific predictor that says stocks will fall if a team from the original American Football League, or its AFC descendant, wins the Super Bowl. If a team from the original National Football League — the leagues merged in 1970 under the NFL banner, divided into two conferences — wins, the market rises. Super Bowl wins by expansion teams created after the merger get counted for whichever conference they’re in, the NFC or AFC.

This year, the Patriots represented the AFC, and the Falcons the NFC. The Patriots won Sunday’s big game, 34-28, in overtime.

Over the Super Bowl’s history, the indicator has been right 40 out of 50 years — a whopping 80% success rate. It’s lagged a bit of late, though. Since 2000, the indicator has been right 12 out of 17 years — a 70% success rate. After being correct seven years in a row, 2016 defied the prognostication — the AFC’s Denver Broncos won the Super Bowl, but the stock market posted a yearly gain.

The Dow Jones Industrial Average (DJIA) was rooting for a win from the Atlanta Falcons — the index has gained an average of 11.4% when an NFC team wins, compared with averaging a 0.85% loss in years the NFC loses.

“There is no intellectual backing for this sort of thing, except that it works,” Wall Street analyst Robert H. Stovall told the Wall Street Journal in 2016.

Courtesy of MarketWatch