Super Bowl Indicator: An Overview
Apr 07, 2023 By Triston Martin

The Super Bowl Indicator is a purely speculative measure of the state of the stock market. The idea behind the Super Bowl Indicator is that if team from the American Football Conference of NFL wins Super Bowl, it indicates that the stock market will have a period of declining prices, sometimes known as bear market, in the next calendar year.

On the other hand, a win for a club from the National Football Conference (NFC) and a win for team from the old National Football League (NFL) before the merger of the NFL is considered to be a victory. The formation of the American Football League (AFL) in 1966—indicates that the stock market would go up the following year.

When the Super Bowl champion hails from the original National Football League, the indicator predicts that equities will rise for the whole year (now the NFC). Yet, when team from the original American Football League, now known as the AFC, wins, the stock market experiences a dip.

The initial hypothesis behind the Super Bowl Indicator was that stock prices would go up for the whole year if team from NFC won "big game," but that they would go down if a club from the AFC prevailed. When Koppett launched the so-called market signal in 1978, it already had a perfect record of accuracy regarding past performance. (With the exception that despite being a member of the American Football Conference (AFC), the Pittsburgh Steelers were included as a National Football Conference (NFC) club since the franchise's roots are in the original National Football League.)

Since then, the Super Bowl Indicator has not been nearly as laser-precise as it was back then, but in general, it has continued to show that the NFC is doing better than the AFC.

As biased a source as you could find on the topic is Ryan Detrick, chief market analyst for independent broker-dealer LPL Financial and a lifetime "Bungles" lover. Yet even he acknowledges that "the numbers don't lie": During the previous 55 Super Bowls, in which the NFC side triumphed, "the S&P 500 Index has done better, and generated positive gains with higher regularity," according to Detrick.

Super Bowl Indicator is example of sports writing mainly for entertainment. Since there is no true link between football club competing in a certain league and stock market in the United States, any relationship that can be found between the two is entirely coincidental. What started as an intriguing piece many decades ago and has continued to make headlines ever since does so at least once every year.

What Can We Expect According to the Super Bowl Indicator?

According to the Super Bowl Indicator, the outcome of the National Football League championship game (NFL) might provide insight into the general trend of the stock market for the next calendar year. The theory states that if a team from the NFC prevails in the Super Bowl, the markets will experience an increase in the following year. In contrast, a victory by the representative of the AFC indicates that the markets will experience a decline in the following year. Although the indicator makes news every year around the time of the big game, it is not scientific, and there is no reason to assume that there is a connection between football and the stock market. Despite this, the indicator does make headlines every year around the time of the big game.

What Percentage of Times Does the Super Bowl Indicator Get It Right?

The Super Bowl Indicator has properly anticipated the directional movement of the S&P 500 41 times out of 56 occasions, which works out to a percentage of 73% as of the end of 2022. It remains to be seen if there is a link between the outcome of Super Bowl LVII in February 2023 and the stock market movement throughout the year.

Who Was the One Responsible for the Super Bowl Indicator?

In 1978, Leonard Koppett, a columnist for the New York Times, came up with the idea for the Super Bowl Indicator. While Koppett's methodology relied on categorizing teams based on football's initial leagues rather than the conference they represented at the time of their title, the indicator had continuously been accurate until that time.

Bottom Line

According to the Super Bowl Indicator, the outcome of the National Football League's (NFL) annual championship game might give insight into how the stock market will fare throughout the following year. The markets are anticipated to register gains for the year if the club representing the National Football Conference (NFC) prevails in the Super Bowl. Still, a victory for the team representing the American Football Conference (AFC) portends market falls. The apparent association between the outcomes of the Super Bowl and the markets is more of a coincidence than a scientific truth, even though the indicator has a success record of over 70%.

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