Wednesday, February 3, 2021
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.
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.
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”.
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.
References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.
Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
All index and market data are from FactSet and MarketWatch.
This Research material was prepared by LPL Financial, LLC.
Securities and advisory services offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC).
Insurance products are offered through LPL or its licensed affiliates. To the extent you are receiving investment advice from a separately registered independent investment advisor that is not an LPL affiliate, please note LPL makes no representation with respect to such entity.
- Not Insured by FDIC/NCUA or Any Other Government Agency
- Not Bank/Credit Union Guaranteed
- Not Bank/Credit Union Deposits or Obligations
- May Lose Value
For Public Use – Tracking # 1-05107175