FLASH FRIDAY: Whither the Super Bowl Indicator ?

FLASH FRIDAY is a weekly content series looking at the past, present and future of capital markets trading and technology. FLASH FRIDAY is sponsored by Instinet, a Nomura company.

Fans of American football and Taylor Swift will be tuning in to watch this year’s Super Bowl on 11 February in Nevada. Swift’s boyfriend plays for The Kansas City Chiefs, who are aiming to become the first team to retain the title in 20 years. Their opponents, The San Francisco 49ers, are aiming to win the trophy for the first time since 1994.

The game has repercussions outside sports. After the Kansas City Chiefs won the AFC championship, American Airlines created a flight from Kansas City to Las Vegas with the flight number 1989, which is the name of a Taylor Swift album. 

In the world of diplomacy, the Japanese Embassy in Washington, D.C. has issued a statement saying that if Swift leaves Tokyo on the night of 10 February, after she finishes her concert in the city, she will have plenty of time to get back for the game despite the 12-hour flight back to the US. 

In the art world, museums have the annual tradition of the Museum Bowl. Art museums in the cities of the competing teams bet on the outcome of the game through the loan of a signature work from their permanent collections. After the Philadelphia Eagles lost in 2023, the Philadelphia Museum of Art had to loan Sailing, a painting by Thomas Eakins, to the Nelson-Atkins museum in Kansas City. 

In the world of finance, there have been attempts to link the result of the game to stock market returns. In 2022 S&P Global Market Intelligence wrote that if the final combined score of the Super Bowl was more than 45 points, the stock market returned an average of 15.9%. For a lower combined score, equity returns were nearly half, at an average of 8.2%. The ratings agency did point out, however, that their data was not intended to represent a fundamental analysis of market trends or historical data and not intended to be the basis for any investment decisions.

A blog, Impersonal Finances, has compiled the results of the Super Bowl Indicator since 1967, when the first game was held. Sportswriter Leonard Koppett put forward the theory that if a team from the original National Football League won the trophy, then the stock market would rise by the end of the year. This proved to be true until 1989 according to the blog. 

“If we apply the original thesis of the Super Bowl Indicator, or SBI, to this year’s matchup, we can deduce that if the San Francisco 49ers win the Super Bowl, the market will finish up. If the Kansas City Chiefs win the Super Bowl, the market will finish down,” said the blog. 

However, the Super Bowl Indicator has been wrong in every year since 2016 – so the opposite may prove to be the case. Regardless, football fans will only be concerned about their team winning the game, regardless of the impact on stocks.

Good luck to both teams and to Swifties.