Blog - Investing Notes

January 16, 2006 – The Stock Market Before and After the Super Bowl

Investor mood affects the market. Sports affect investor mood. The biggest mood-mover among sporting events is the Super Bowl. Is the week before the Super Bowl especially distracting and anxiety-producing? Is the week after the Super Bowl focusing and anxiety-relieving? (Presumably, post-game elation and depression cancel between respective fan bases.) Using past Super Bowl dates since inception and daily/weekly S&P 500 index data for 1967-2005, we find that:

The following chart compares the average weekly behavior of the S&P 500 index for: all weeks during 1967-2005 (average +0.16% with standard deviation 2.11%); weeks during January during 1967-2005 (average +0.20% with standard deviation 2.14%); the week just before Super Bowls (average -0.11% with standard deviation 2.37%); and, the week just after Super Bowls (average +0.74% with standard deviation 1.98%). The diamonds mark the averages, and the error bars show one standard deviation above and below the average. These statistics suggest that the week before Super Bowls tends to be a weak week with volatility higher than usual , while the week after Super Bowls tends to be a strong week with volatility lower than usual. The sample size for the Super Bowl weeks is 39, offering modest confidence in results.

The next chart shows the profile of average S&P 500 index behavior during the week before and after the Super Bowl. The horizontal axis shows trading days before and after S = "Super Sunday." We treat the two occasions when the Monday before the Super Bowl is a market-closed holiday as no-change trading days. Again, sample size is 39, so confidence in the result is modest. Standard deviations are large compared to these movements.

In summary, the odds favor buying mid-week before the Super Bowl for a modest gain the next week. As always, beware of standard deviations.

This effect persists for data limited to 1990-2005.

Much of the gain from the week before to the week after Super Bowls comes from years when the NFC wins. However, the sample sizes for NFC wins only and AFC wins only are very small (very low confidence). AFC win streaks occur in the 1970s (mostly bad for the stock market), while the big NFC streak came during the mid-1980s through the mid-1990s (mostly good for the stock market).

For related research, see Blog Synthesis: Calendar Effects and the Trading Calendar.