It took until the final couple minutes of the last game of the NFL regular season to decide all of the teams that made the playoffs and the right to compete to play in Super Bowl 48 on February 2, 2014 at MetLife Stadium in East Rutherford, New Jersey. The six teams from the AFC are the Denver Broncos, New England Patriots, Kansas City Chiefs, Indianapolis Colts, San Diego Chargers, and Cincinnati Bengals. Representing the NFC will be the Seattle Seahawks, Carolina Panthers, New Orleans Saints, Philadelphia Eagles, San Francisco 49ers, and Green Bay Packers. In the first 47 Super Bowls, the NFC has won 25 and the AFC has come out victorious in 22.
So, what does this mean to the stock market, you may ask? Well, let’s take a look at which conference winning the vaunted championship trophy is better for Wall Street.
NFC Super Bowl Victory Boosts DJIA?
To be clear, there have been some teams moving to different cities and teams changing conferences. For example, the Indianapolis Colts were the Baltimore Colts from 1953 to 1984. Moreover, Baltimore was a member of the old National Football League until the merger with the American Football League in 1970, which sent Baltimore to the American Football Conference (AFC) as part of the new NFL that included the formation of the National Football Conference (NFC). In today’s league, that would mean that two AFC teams played each other in Super Bowl 3 (Baltimore/New York Jets). So, for the intents and purposes of this for-fun exercise, we will discard changes such as that and look at the teams as where they stood at the time of the Super Bowl.
That said, regardless of which conference comes out victorious in the Super Bowl, the Dow has advanced on a yearly basis 34 times in the last 47 years since Super Bowl 1, or 72.3% of the time. In the 25 NFC Super Bowl victories, the Dow has closed up for the year 21 times, or 84% of the time. In the AFC’s 22 Super Bowl wins, the Dow has closed up 13 times, or 59.1% of the time.
The average gain for the Dow during NFC-winning years is 16.04% and the average loss during down years for the Dow when the NFC wins the championship is 11.85%. When the AFC wins the Super Bowl during a green year for the Dow, the average yearly gain is 15.24%. Conversely, the average loss during a red year for the Dow when the AFC wins is 12.68%.
Add it all up and the Dow has a 24.9% greater chance of advancing during a year that the NFC wins the Super Bowl and will produce 0.8% higher returns. Even if the Dow loses ground during the year, it’s generally 0.83% less than when the AFC wins.
Data Skewed by Successful Teams
To break it down to the playoff teams this year; averages can get skewed a bit because some teams have made it to the Super Bowl on multiple occasions, while others have only been to the big show once. New England (3 wins, 4 losses) has made it to the Super Bowl 7 times; San Francisco (5 wins, 1 loss) and Denver (2 wins, 4 losses) have made it 6 times; Green Bay (4 wins, 1 loss) has made it 5 times; Indianapolis (1 win and 1 loss when in Baltimore, 1 win in Indy) has made it 3 times; Kansas City (1 win, 1 loss), Cincinnati (2 losses) and Philly (2 losses) have made it twice; and Seattle (1 loss), Carolina (1 loss), New Orleans (1 win) and San Diego (1 loss) have made it once.
Obviously, these calculations can vary greatly depending on what the main metrics are.
Looking purely at average moves for the Dow Jones, San Diego’s lone appearance (a loss to San Francisco in 1995) saw the Dow gain 33.5 percent that year for the most robust average gain. San Diego is an AFC team. For the NFC, the biggest gains for the Dow have come from San Francisco, with the Dow moving up an average of 21.58 percent in the six Super Bowl appearances of the 49ers.
So, based on history, it could be argued that the Dow Jones will benefit most from the San Francisco 49ers beating the San Diego Chargers in Super Bowl 48.
By the way, the current odds of San Francisco winning the Super Bowl are 6-to-1.
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