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The Super Bowl Indicator

The Super Bowl Indicator

February 03, 2021
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Is Brady or Mahomes better for stocks? Of course, we would not suggest investing based on this game, but with the big game around the corner, let’s talk Super Bowl Indicator.

  • Historically, if a team from the AFC wins the Super Bowl, the S&P 500 Index is up 7.1% on average for the year versus 10.2% for the NFC.
  • Stocks have been quite weak when Tom Brady is in the game (especially if he loses).
  • The best stock returns out of all 20 Super Bowl winners came when the Tampa Bay Buccaneers won.
  • We will discuss in more detail later today on the LPL Research blog.

Daily Insights

US stocks modestly higher

  • US tech earnings look to extend the rally; Nasdaq 100 outperforming
  • European stocks mostly positive in midday trading with the United Kingdom (UK) the lone decliner
  • Asian markets mixed overnight with China underperforming

It’s not much but we’ll take it. S&P 500 Index earnings growth for the fourth quarter has turned positive.

  • With 222 S&P 500 companies having reported results, earnings are tracking to a 0.1% year-over-year increase (source: FactSet).
  • When earnings season began, consensus expectations saw a double-digit decline.
  • This is an impressive achievement by corporate America given that the year-ago quarter (Q4 2019) was pre-pandemic.
  • Financials, technology and materials have generated the most growth—each in the 14-15% range.

Technical update. Stocks rallied again on Tuesday, putting the S&P 500 on pace for its best week since the election just two days in. Breadth was solid again, though not as strong as Monday with advancers outnumbering decliners by 3:1 on the NYSE. Resistance comes into play for the S&P 500 at the January highs just below 3870.

Debt week continues

  • We share five reasons why investors should not be concerned about corporate America’s debt load in our latest installment in “Debt Week” from the LPL Research team.
  • Monday: We discussed the US federal debt in Weekly Market Commentary: Markets Shrug Off Debt Levels.
  • Tuesday: we tackled household debt.

COVID-19 news

The United States reported 111,000 new COVID-19 cases on Tuesday, down 25% week over week (source: Johns Hopkins).

  • Hospitalizations are down 30% from the peak in early January, with every state except Vermont reporting declines.
  • United Kingdom (UK) cases continue to fall sharply despite the more infectious variant—down 61% from the peak.

Street View Video Delivers A Message In A Bottle

LPL Research Chief Investment Officer Burt White contends there is one metric above all others that may tell us how well the economy is doing in the new Street View “Message In A Bottle”.

 

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All index and market data are from FactSet and MarketWatch.

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