Super Bowl Trophy

Investors and aspiring retirees alike should be rooting for the Carolina Panthers in the Super Bowl next weekend, and not because of quarterback Cam Newton’s electrifying play. It turns out there’s a correlation between the conference of the big game winner and the performance of the Dow Jones Industrial Average.

When the winner comes from the National Football Conference, the successor to the original National Football League, the Dow rises 11.4% on average that year. But when the victor is from the American Football Conference, rooted in the younger American Football League, it rises just 3.6%, according to LPL Financial. An NFC victory presages a positive year for the Dow 85% of the time; an AFC win has led to an up year 57% of the time. Carolina represents the NFC this year, while the Denver Broncos is the AFC team.

There have been some notable exceptions to the rule. The New York Giants defeated the AFC’s New England Patriots in 2008, the year the Dow crashed and ended down 34%. And in 2013, when the Dow shot 26% higher, the AFC’s Baltimore Ravens won.

The problem this year is that the Dow is already playing from behind, and it’s facing some powerful opponents—the slowing Chinese economy, an unpredictable presidential campaign, and the robust defensive line of the Federal Reserve.

“With the Dow already down 8% year to date, stocks can use all the help they can get, so go Panthers!” wrote LPL’s chief economic strategist John Canally.

Source:  Barron’s