Investors hope Tom Brady's Super Bowl win changes stock market indicator's fortunes

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Stock market investors hope Tom Brady winning Super Bowl LV as a member of the Tampa Bay Buccaneers turns around their fortunes.

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SPYSPDR S&P 500 ETF389.08+1.44+0.37%
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The S&P 500 previously underperformed in years that Brady won the big game as a member of the New England Patriots, and has done even worse when he lost.

“Stocks don’t do well when he [Brady] is in the game, wrote Ryan Detrick, chief market strategist at LPL Financial.

The index has averaged a 6% gain during Brady victories and returned an average of 0.5% in years that he appeared in the game, as tracked by LPL. The S&P 500 has averaged an 8% annual gain since its founding in 1928.

Among those years was 2002, where the S&P 500 lost 23% (Brady won) at the tail end of the bursting of the dot-com bubble. The index fell 39% during the 2008 financial crisis (Brady lost).

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But Brady winning as a member of Tampa Bay could be a good omen as the “best stock market performance happens after the Bucs win the big game,” Detrick wrote.

The S&P 500 index soared 26% in 2003, the only previous year that Tampa Bay won the Super Bowl. The stock market typically performs better when a team from the National Football League (now National Football Conference), like Tampa, wins the big game.

In those instances, the S&P 500 has rallied an average of 10.2% for the year compared with a return of 7.1% when an American Football League (now American Football Conference) team was victorious, according to LPL data.

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The S&P has posted an annual gain in 22 of the 28 years, or 79% of the time, an NFC team has won. It has gained annually 65% of the time over its 92-year history. 

Of course, the Super Bowl winner and stock market’s performance are not correlated. Just because a team from one conference wins or loses doesn’t mean stocks will perform a certain way as their performance is dictated by fundamentals, technical and sentiment.

The S&P 500 has climbed a wall of worry in recent weeks as investors fret about stretched valuations and the possibility that herd immunity from COVID-19 may not occur as quickly as originally hoped. The index has climbed 3.48% this year through Friday, extending the gain off the March low to 74%, as the Fed’s loose monetary policy and an unprecedented amount of fiscal stimulus have provided support.

The possibility of President Biden’s proposed $1.9 trillion aid package that will include a $1,400 check to most, but not all Americans, is also helping sentiment.

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