Can The Super Bowl, FIFA World Cup Predict The Stock Market?
Every winter, millions of Americans gather to watch the biggest football game of the year.
Most of them are unaware, however, that the outcome could have an impact on investors’ portfolios.
Stephen Eckett, author of The UK Stock Market Almanac 2014, has studied the unlikely effects that major sporting events can have on Wall Street.
The Super Bowl effect (which was covered in last year’s Almanac) states that if the game is won by a team from the old National Football League, the stock market will end the year higher than it began. But if a team from the old American Football League wins the Super Bowl, the year will end lower.
Twenty years ago, this odd indicator proved to be accurate 91 percent of the time. A 2010 study showed that its accuracy had fallen to 79 percent in more recent times. Even so, this oddity — coincidental or not — should not be ignored.
The FIFA World Cup, which is discussed in the latest edition of Eckett’s Almanac, can also impact the stock market.
Eckett said that as soon as the host country has been announced for FIFA or even the Olympics — which could be six or eight years in advance of the event — investors might want to take action.
“Because it’s very early on, and it’s really the investment in infrastructure that one is investing in,” Eckett told Benzinga. “All that infrastructure spending that’s going to be made to get the country ready to host the biggest event in the world, really. By the time the event actually happens, all of the money has been spent.”
Thus, Eckett said that as soon as FIFA is over, it might be best to sell the market because “all the excitement and energy has disappeared at that point.”
Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ
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