Blog - Investing Notes

February 5, 2010 - Update: The Stock Market and the Super Bowl

Investor mood affects the market. Sports affect investor mood. The biggest mood-mover among sporting events in the U.S. is the National Football League's 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 1967-2009 (43 events), we find that:

The following chart compares the average weekly behavior of the S&P 500 Index for the week before and the week after the Super Bowl over the entire sample period and over two approximately equal duration subperiods, with one standard deviation variability ranges. The average return for all weeks during 1967-2009 is +0.14%. Results show that:

Over the entire sample period, the average return during the week preceding (following) the Super Bowl is +0.00% (+0.68%), with standard deviation 2.41% (2.17%).

Over the 1967-1987 subperiod, the average return during the week preceding (following) the Super Bowl is -0.25% (+0.88%), with standard deviation 2.10% (1.82%).

Over the 1988-2009 subperiod, the average return during the week preceding (following) the Super Bowl is +0.24% (+0.48%), with standard deviation 2.70% (2.50%).

All three results indicate that the week after the Super Bowl is stronger than the week before, but the early subperiod drives most of the difference. Sorting according to whether the American Football Conference or National Football Conference team wins the Super Bowl offers no insights.

Might daily data clarify?

The next chart plots the average daily S&P 500 Index returns from five trading days before "Super Sunday" (S-5) to five trading days after (S+5), excluding two Mondays before the Super Bowl that are market holidays. Results for the five trading days before the Super Bowl are erratic, but all three samples/subsamples agree on mid-week strength for the five trading days after. Sample (subsample) size is 43 (21-22), with variability large compared to these movements, so confidence in predictability is low.

In summary, evidence from simple tests on a modest sample suggests that the U.S. stock market may lean toward abnormal strength during the week after the Super Bowl.

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