Super Bowl's week is over us. Kansas City bosses try to become the first team in three peat, while Philadelphia Eagles try to retaliate for their loss to the bosses in the Super Bowl 57. Super Bowl is one of the most expected and viewed sports events of the year; Also one of the wider bets. And believe it or not, some investors even use the result to predict the running of net capital markets.
The Super Bowl indicator is one of the most crazy markets I have heard over the years. Something goes: the winner of the Super Bowl can predict the direction of the stock market during this calendar year. If the winning team is welcomed by the American Football Conference (bosses), then the market will fall this calendar year. In contrast, if the winning team is greeted by the National Football Conference (Eagles), the markets will progress during the calendar year.
I withdrew the returns of the calendar year for the S&P 500 index since 1980 to see if the winner of the Super Bowl really predicts the next running of capital. I'm sure saying that formulating market expectations based on the Super Bowl winning team is not a sound investment strategy.
As you can see in Figure 1, since 1980 the team representing the NFC has won Super Bowl 25 times while the AFC team has won 20 times. During those 45 years, the S&P 500 index experienced 37 years of positive returns and eight years of negative returns. Of those eight years of negative returns, the AFC team, which is supposed to predict a negative year of capital, won only Super Bowl three times, or 37.5% of the time. In contrast, during the 37 years of positive capital return, the NFC team, which is supposed to predict a positive year for capital, won 20 times, or 54% of the time (source: Zeph).

Enough quite interesting, during the big bull market of the 1990s, the NFC reigned the supreme, winning the first eight super Bowls of that decade, which followed by winning the last five super Bowls of the 1980s, which also corresponded to the performance of strong capital (source: Zeph).
While there are some trends that may suggest the Super Bowl outcome can predict the running of net capital this year, such as the late 1980s and 90s, the Super Bowl indicator is more myth and fun and games than the actual truth. Remember, “correlation does not mean cause”.
With this, fly, eagle, fly!
Ryan Nauman is the market strategist in Zephwhich helps investment professionals make more informed investment decisions on behalf of their clients.