Have you heard of the Super Bowl stock indicator? Millions of Americans and global citizens tune in around the globe every year to watch the Super Bowl and its famous ads. Last year alone, more than 115 million viewers watched the Kansas City Chiefs vs. the Philadelphia Eagles in the US.
This broke the previous NFL record set 2015 (Patriots vs. Seahawks). Most people don’t know that a Super Bowl indicator has existed since 1978. Many stock market experts have rightfully questioned its reliability.
The Super Bowl is also the best time to watch advertisements by various big companies. How have they fared on the stock market following their ad campaign? Learn more about the Super Bowl indicator and the stocks showcasing their ads during this event.
Table of Contents
Super Bowl Stock Indicator Introduction
First, I want to immediately announce that the Super Bowl indicator is not a valid stock market predictor. It was first introduced in The New York Times in 1978.
At its peak, the success rate was 90%. However, this is a perfect example of ‘’correlation does not imply causation”. Just because there seems to be a correlation between two events doesn’t mean they are related.
Please remember that a smart investment strategy should be centered around your goals, time horizon, risk tolerance, and financial plan. Regardless, it is still interesting to quickly glance at the logic behind the Super Bowl indicator.
How the Super Bowl Indicator Works
According to this indicator, when an AFC team wins the Super Bowl, the stock market (S&P 500 index) will decline that year (bear market). However, when a NFC team wins, the stock market will rise (bull market).
I don’t see a world where this would ever make sense. However, as mentioned earlier, this indicator performed very successfully in its first two decades.
If we look at its performance since 2016, it has been wrong 7 out of 8 times. The stock market and the Super Bowl winners were only in sync in 2021 when the Tampa Bay Buccaneers (NFC) won. The S&P 500 gained 14.51% that year.
Furthermore, the indicator has many flaws since many teams, such as the Pittsburgh Steelers, changed conferences. Expansion teams have also moved around. Despite all this, imagining how a major sports event can cause the stock market to perform a certain way is amusing.
Please note that neither the Super Bowl nor the FIFA World Cup will have a long-lasting effect on the stock market.
Public Companies and Super Bowl Advertisements
The Super Bowl may not have any consequences on the stock market, but the advertisements shown during this event may have positive or negative effects on the companies on the stock market.
Many of the most memorable ads are still talked about years later. Who can forget Bud Light’s Bud Knight? Doritos, Mountain Dew, and Mr. Clean also claim the top ad of the century. Every year, the price of airing a commercial goes up.
Last year, they aired a 30-second commercial that cost almost \$7M. Since Super Bowl commercials began, Budweiser (142) claims the throne for the most ads, followed by Pepsi (97), McDonald’s (54), Ford (52), Coca-Cola (51), Toyota (43), Dodge (39) and the list goes on. How have these companies performed on the stock market?
Top Super Bowl Spenders and the Stock Market
If you look at the names of the top spenders, they can be recognized all over the US and beyond. However, their Super Bowl commercials will not significantly impact their stock price.
During the Super Bowl, you spend time with your family, friends, or colleagues. You expect to be entertained during the game and the commercial breaks. This is exactly what these companies focus on.
Their ads must be memorable and make people speak. These companies also focus on comfort. The Super Bowl occurs in February, and temperatures in the US, Canada, and Europe tend to be low, if not freezing.
Viewers who see fun and engaging commercials feel better and relate the company to that feeling.
How did Pepsi (NASDAQ: PEP), Mcdonald’s (NYSE: MCD), Ford (NYSE: F), Coca-Cola (NYSE: KO), Toyota (OTCMKTS: TOYOF) and Dodge (Stellantis – NYSE: STLA) perform in the last five years?
All their stocks are up between 20 and 60%, which remains below the S&P (55% gain). Even though these companies rarely skip their Super Bowl ad campaign, their presence or absence should not influence their stock market performance.
Chart by TradingView
2022 Super Bowl Ads
Super Bowl ads in 2022 featured companies that fared particularly badly since. Some meme and pandemic stocks decided to partake in the commercials, but the effects were largely adverse.
FTX, which went bankrupt, Carvana (down almost 70%), and Coinbase (down nearly 60%) were among the biggest losers. Coinbase’s ad caused their application to crash because too many users joined, and their stock never recovered.
Meanwhile, FTX was one of the biggest scandals of the year. As a result, all crypto ads were banned in 2023, and it is unlikely to see any in 2024. We can say that 2022 was a trial year for many companies after a difficult few years during the COVID era.
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2023 and Workday
In 2023, it was the return of conventional Super Bowl commercials. It was officially a time for comfort brought to you by your favorite food, beverage, and your favorite American companies.
However, one company stood out: Workday (NASDAQ: WDAY), a system software and human resource company. Their ad featured Billy Idol, Gary Clark Jr., Joan Jett, Ozzy Osbourne, and Paul Stanley.
COVID was officially over, and everyone was back to work. Despite this, many were skeptical about Workday’s commercial because the Bay Area company didn’t fit that year’s Super Bowl commercials theme. However the commercial was successful, but the company’s stock wasn’t positively rewarded.
What can we learn from recent Super Bowl campaigns? The last two years have shown us that there is beginning to be some seasonality with the ads.
New companies enter the game, and their ads pertain to the public’s needs. It will be entertaining to see which public companies will attempt to win the fan’s hearts next year.
Final Thoughts: Super Bowl Stock Indicator
To conclude, the Super Bowl stock indicator was created without any data. Unlike the Santa Claus rally or the ‘’sell in May and go away” theory, the Super Bowl is not a viable theory for the stock market movement.
As for the companies partaking in the Super Bowl commercials, the regulars perform well, but the newcomers don’t have a proven track record.
All this is to say that you shouldn’t base your stock market predictions on the events during the Super Bowl. Do your research and be smart with your stock picks.
If you want to learn more about profiting from the stock market, head to our free library of educational courses. We have something for everyone. We teach you real technical analysis, so you don’t have to rely on indicators like this one.
Frequently Asked Questions
Known as the Super Bowl indicator, this is used to choose a direction of the market for the year based on who wins. An AFC win means a bear market. In contrast, an NFC win means a bull market.
The Super Bowl happens every year in February. It moves later in the monthly depending on how many games the commissioner can get added to the schedule.
