Market Extra: Does fate of the stock market rest on Tom Brady’s arm? Express News
It’s all on you, Tom Brady.
When New England Patriots quarterback Tom Brady steps on the turf at NRG Stadium in Houston, Texas, this Sunday, there will be more than his fifth Super Bowl win and immortality at stake. He could very easily decide the fate of the stock market for the rest of the year with one laser-sharp pass, or for that matter, one fumble.
At least that would seem to be the case if you’re a believer in the wholly unscientific but popular Super Bowl indicator. It suggests that if the Super Bowl is won by a team from the American Football Conference, stocks will fall for the year, while if a team from the National Football Conference wins, the market will gain.
The New England Patriots are in the AFC, while their opponent, the Atlanta Falcons, represent the NFC.
“Oddly enough, this indicator has been correct 80% of the time since 1967,” said Sam Stovall, chief investment strategist at CFRA, said in a Monday note with the title, “Wall Street’s Odd Infatuation with Correlations that Lack Causation.”
Sadly for stocks, the online betting site Sportsbook has the Patriots as 3-point favorites to win the Vince Lombardi Trophy.
But all may not be lost.
Regardless of what the Super Bowl and Brady may have to say about the market, the Asian astrology index suggests that stocks could count on modest, if not spectacular, gains this year, according to Stovall.
There are 12 astrology signs under the lunar calendar—rat, ox, tiger, rabbit, dragon, snake, horse, sheep, monkey, rooster, dog and pig. This past Saturday marked the beginning of the year of the rooster in countries that celebrate Lunar New Year—namely China, Korea and Vietnam.
Since 1945, the S&P 500 climbed 4.1% during rooster years, which is “nothing to crow about,” Stovall notes. But the statistic is in line with CFRA’s outlook for the S&P 500 to rise 4.3% to 2,335 in 2017.
“Favorable factors include a modest 3.3% expected gain in global economic growth, versus 3.1% likely for 2016 and a 2.4% rise in U.S. real GDP versus the anemic 1.6% rise in 2016,” said Stovall. “We also forecast an 11.3% improvement in EPS, benefiting from easier comparisons with 2016, a likely reduction in corporate and individual taxes, as well as a possible infrastructure-spending bill.”
Nonetheless, elevated valuations and the Federal Reserve’s tightening bias could weigh on the market’s upside, he said. As such, the strategist recommends overweighting consumer discretionary, industrials and materials sectors, while underweighting the consumer staples, energy, real estate and utilities.
Stocks rose Friday to end little changed on a weekly basis and near record highs. The S&P
saw a weekly gain of 0.1%, while the Dow
regained the 20,000 mark but ended 0.1% below last week’s finish.
See: President Trump looms large over stocks despite earnings deluge
[This is an updated version of a story originally published on Jan. 30.]