Three weeks ago, I examined the NFL playoff contenders by their potential effects on the Dow Jones Industrial Average. Some had storied pasts of positive financial repercussions, others did not. Some had only one year of success to their name, and others I was left ranking by association.
Alas the field has been narrowed after weeks of contests, drama, and struggle, and we have finally come down to two: the New England Patriots versus the New York Giants. Of course, much will be made of the fact that the Giants are an original NFL team and the Patriots (formerly of Boston) are an original AFL team. As I did three weeks ago, many will discuss the Super Bowl Indicator, and its 80% success rate. But what lies in the numbers? What are the past results of the market following previous championships by these two teams? Should we really root against a historical season by the Patriots for the sake of the market?
In a word, yes.
Since 2002, the Patriots have been bad luck for the market. After New England won Super Bowl XXXVI in 2002, the Dow Jones Industrial Average responded by dropping 16.8% from 10,021.71 to 8341.63. The S&P 500 also took a large fall, losing 23.3% from 1148.08 to 879.82.
Following their second championship in XXXVIII, the Patriots disproved the Super Bowl Indicator, and the DJIA increased from 10,452.74 to 10,783.01, a 3.1% gain. Like the Dow Jones, the S&P 500 also increased, climbing 8.3% from 1,111.92 to 1,211.92.
The Patriots most recent win in 2005's XXXIX however, proved the Patriots were not above the Super Bowl Indicator. Following their victory, the DJIA dropped, albeit by .7% from 10,783.75 to 10,717.50. The S&P 500, on the other hand, actually increased, going up 3% from 1,211.92 to 1,248.29.
So since 2002, the Dow Jones Industrial Average has followed Patriots wins with two decreases and one slight increase. The S&P 500 has followed the same Patriot championships with one major decrease, one average increase, and one slight increase.
Then what about the Giants? As I wrote earlier, "As expected from a team hailing from the home of Wall Street, the New York Giant Super Bowl victories precede good years for the Dow." Although their victory in Super Bowl XXI in 1987 brought little to cheer about, the DJIA did increase 2.2% and the S&P 500 climbed a likewise 2%.
The second and most recent Giants' Super Bowl victory, in 1991's Super Bowl XXV, on the other hand, preceded a very good year for Wall Street, with the Dow climbing 17% from 2633.66 to 3168.83 and the S&P 500 also going up by a worthwhile 11.1% clip, from 330.2 to 371.36.
On an added note, if the underdog Giants can pull off the upset and the market responds as it as for their previous victories, the Giants will join only the Redskins and the Packers as the only teams to see positive gains after three Super Bowl wins. And since the market's performance is sketchy at best, horrible at worst following a Patriots' win, the choice of who the market wants you to root for is clear.
(Picture from: http://cf1.acc-tv.com/)