The Super Bowl is one of the most-watched televised events in the United States, recording millions of viewers each year. But, it isn't just sports fans who tune in to this massive sporting event. Some investors also look to the 澳洲幸运5官方开奖结果体彩网:Super Bowl to help them determine the direction of the 澳洲幸运5官方开奖结果体彩网:stock market by using the Super Bowl Indicator.

The Super Bowl Indicator is a nonscientific 澳洲幸运5官方开奖结果体彩网:barometer of the stock market, suggesting that the outcome of the Super Bowl can predict the stock market's direction for the coming year. Keep reading to learn more about the 澳洲幸运5官方开奖结果体彩网:indicator, its history, and how successfully it predicts whether stocks will turn bullish or bearish.

What Is the Super Bowl Indicator?

The idea behind the Super Bowl indicator is that a Super Bowl win for an NFL team from the American Football Conference predicts a stock market decline (a 澳洲幸运5官方开奖结果体彩网:bear market) in the coming year. On the other hand, a win for a team from the National Football Conference foretells a rise in the market or a bull run in the upcoming year.

The Super Bowl Indicator is an example of purely fun sports writing and not a real 澳洲幸运5官方开奖结果体彩网:market predictor. There is no real connection between a football team and the U.S. stock market. This means that any apparent relationship between the two is purely a coincidence. What began as an interesting column many decades ago continues to make a new headline at least once a year.

History of the Super Bowl Indicator

Leonard Koppett, a sportswriter for The New York Times, introduced the Super Bowl Indicator in 1978. Koppett realized that there was a correlation between the outcome of the Super Bowl and the direction of the markets, with 11 out of 12 games accurately predicting the direction of the market until that point.

Despite this, it's important to note that the Super Bowl Indicator is completely irrelevant if you consider it as a means of predicting the stock market. That's because there's no reason to believe that the winner of a football game dictates the performance of the stock market. However, that hasn’t stopped people from talking and writing about it for the past four decades.

How Accurate Is the Super Bowl Indicator?

From 1967 to 2023, the indicator was correct with about 63% to 68% accuracy, depending on the index. From 2001 through 2023, however, it has only been correct about 35% to 39% of the time.

At one point in time, the Super Bowl Indicator boasted a more than 90% success rate in predicting the up-or-down outcome of the 澳洲幸运5官方开奖结果体彩网:S&P 500 before the dotcom years (1998-2001). However, the old maxim applies: Correlation does not imply causation.

Through 2023, as measured by the S&P 500 Index, the indicator has a success rate of around 68%. The indicator has not been as successful. In 2008, despite the New York Giants (NFC) winning the Super Bowl, which supposedly indicated a bull market, the stock market suffered one of the largest downturns since the Great Depression. However, down markets failed to materialize in both 2016 and 2017, when the Denver Broncos and New England Patriots, both original AFC teams, won Super Bowls. The indicator fell short yet again in 2022 when a victory by the LA Rams of the NFC should have led to market gains, but the S&P 500 ended the year nearly 20% lower. Indeed, from 2004 through 2023, the indicator has only been correct six times out of twenty.

The Bottom Line

The Super Bowl Indicator suggests that the NFL's annual championship match-up provides a forecast for the current year's stock market performance. If the National Football Conference (NFC) team wins the Super Bowl, the markets are expected to post gains for the year, while a victory for the American Football Conference (AFC) forebodes market declines. Although the indicator's success rate is about 70% since the first Super Bowl, the apparent correlation between the results of the Super Bowl and the markets is a coincidence rather than a scientific fact. Indeed, the reliability of the indicator over the past few decades has not been as impressive.