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Want A Strong S&P 500 Return? Then Root For The Seahawks This Sunday

By Alex Létourneau Kitco News
Friday January 30, 2015 8:00 AM

(Kitco News) - If you’re vested in the S&P 500 and have absolutely no interest in football, you’ll be a bandwagon Seattle Seahawks fan come Super Bowl Sunday.

As the New England Patriots and the Seahawks line up for Super Bowl XLIV in Glendale, Arizona - investors – those outside of New England – will be firmly in the Seahawks corner, as NFC teams that go on to win the Super Bowl usually signify a higher S&P 500 index for the year.

In a special report by Colin Cieszynski, chief market strategist at CMC Markets, he noted the correlation between an NFC team winning the Super Bowl, compared to an AFC team winning, and what it does for the S&P 500.

“Over the last 48 calendar years, the S&P 500 has returned 8.4% on average, but returns have varied significantly when compared with where the Super Bowl winners have been located,” he said.

NFC teams have won 26 of 48 Super Bowls, which translated into an 11.1% average S&P 500 return that year. AFC teams have won 22 Super Bowls and the average S&P 500 return has been 5.1%.

The fact that the Seahawks are in the Super Bowl at all is a good sign for the S&P 500.

“Seattle has been in the Super Bowl two times previously winning once and losing once,” Cieszynski noted. “In both cases the market has gained over 10% that year, so just having Seattle in the big game could be cause for cheer for bulls.”

Unfortunately, the Patriots going to the ship doesn’t translate into a great year for the index.

According to the report, when the Patriots play in the Super Bowl, the average S&P 500 return dropped 3.64%. Should they win, it drops a little more to 3.79%. But if they lose, the average return plummets to a 12.54% loss.

Lastly, in the event of a defending champion finding their way back to the game, win or lose, the average return remains up.

“Trades appear to be eternally looking for the next big thing it seems,” he said. “Markets have posted over 10% gains on average in years where the challenger knocked the champ off the top of the heap.”

Defending champions retaining the Lombardi trophy have signaled 4.66% average market returns, while a loss has shown a 13.47% average market return.

Any way you cut it, the NFL doesn’t dictate the markets, but if you’re looking for a reason to watch one of the biggest sporting events of the year, this should tweak some interest.

Or the Katy Perry halftime show. You know, whichever.

Sunday’s kickoff time is set for 6:30 p.m. ET.

By Alex Létourneau of Kitco News aletourneau@kitco.com
Follow Alex Letourneau @alex_letourneau

 

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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