Stock Market Analysis Today – What the Super Bowl Means for the Stock Market. It’s Not What You Think.
Super Bowl Sunday is just two days away. For investors, there is nothing to fear—even if Patrick Mahomes’ Kansas City Chiefs beat Tom Brady’s Tampa Bay Buccaneers.
A popular myth says it is better for the stock market if the NFC, represented by the Bucs, wins the game. There is some truth to the fairy tale. The
has produced a positive return in 23 of the 27 years the NFC won, but has risen in just 20 of the 27 years the AFC emerged victorious. The average return in NFC winning years is about 12%. The AFC’s return is roughly 9%.
But let’s think about that for a minute. The market has gone up 80% of the years the Super Bowl has been played. It has gained in 85% of the years the NFC won and 75% of the years the AFC won. The 5% variation from the average is just the random variation one would expect to find in the situation.
Which makes complete sense. There is no fundamental reason that a football game played in January would matter for the stock market. As former British Prime Minister Benjamin Disraeli once said, there are lies, damn lies, and statistics.
We know which one the Super Bowl theory is. So just sit back, and enjoy the game.
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Senate Democrats Advance Biden’s $1.9 Trillion Stimulus Package
The Senate passed a budget resolution on Friday morning for President Joe Biden’s $1.9 trillion aid package, setting up the bill to be passed by a simple majority in the upper chamber.
- The votes to advance the resolution were split along party lines, with Vice President Kamala Harris breaking the tie. The resolution now goes to the Democrat-controlled House.
- Separately, a group of Congressional Democrats, including Senate Majority Leader Chuck Schumer, on Thursday called on President Biden to cancel up to $50,000 in student loan debt by executive order.
- The group, which also includes Sen. Elizabeth Warren (D., Mass.) and Ayanna Pressley (D., Mass.), reintroduced a nonbinding resolution calling on Biden to wipe out about 80% of the $1.6 trillion owed to the federal government by more than 40 million Americans.
- Biden has said he does not support an executive order canceling student debt. Instead, the White House reiterated Thursday that the president supports eliminating up to $10,000 per borrower in student debt through legislation passed by Congress.
What’s Next: Biden’s stimulus does not include canceling student loan debt, but payments on federal student loans are suspended through Sept. 30 of this year.
Johnson & Johnson Seeks Emergency Authorization for Covid Vaccine
Johnson & Johnson
said Thursday it submitted its vaccine to the U.S. Food and Drug Administration for emergency use authorization.
- J&J said it plans to distribute the vaccine to the U.S. government following authorization. It expects to supply 100 million doses to the U.S. in the first half of the year. Paul Stoffels, the company’s chief scientist, said in a news release that the company is prepared to begin shipping upon authorization.
- Last week, the company said its single-dose vaccine was 66% effective in preventing moderate to severe Covid-19. A Phase 3 trial of more than 43,000 participants showed it was 85% effective at preventing severe disease. It also prevented hospitalization and death from Covid-19 completely at 28 days following vaccination.
- The 85% effective rate was consistent even in South Africa, where a new strain of Covid-19 has worried experts.
Separately, Novavax said it has begun to submit the materials required for emergency authorization by the FDA of its Covid-19 vaccine even as it continues to run its Phase 3 trials in the U.S. Last week,
said its shots were 89% effective at preventing the virus in a UK. study.
What’s Next: Johnson & Johnson vaccine’s ability to prevent severe illness suggests that it will likely have an important role in helping control the pandemic. One key element will be price: The vaccine maker intends to distribute its vaccine on a not-for-profit basis during the pandemic.
—Connor Smith & Josh Nathan-Kazis
China Is Ahead of the U.S. in Beating Back the Virus, But Lags Behind on Vaccinations
As the U.S. races to administer scarce vaccine doses to stave off its continuing Covid-19 pandemic, the world’s second-largest economy is in a very different situation. China reports that it has effectively stopped infections within its borders, but is far behind other top economies in its vaccination program.
- China had no reported deaths for six months, until the middle of January when it suffered its worst outbreak since the spring in Hebei province, with new daily cases surging to more than 100. That average has fallen to 50 new infections a day, versus the more than 135,000 a day in the U.S.
- While China’s infections are currently under control, less than 2% of its residents had been vaccinated by the end of January, GaveKal-Dragonomics Research said in a note to clients. That’s well below the UK.’s 14.4% rate or the U.S.’s 9.3% rate.
- That slow pace pushes back the date when China will reach herd immunity. Should it suffer another resurgence, GaveKal notes that the country will likely rely on the same harsh tactics it used to get the pandemic under control, but which were disruptive to the global economy and supply chains.
- Neither of China’s leading vaccines makers, Sinovac or Sinopharm, have published large-scale study results proving their drugs’ effectiveness, although a Brazilian trial found the Sinovac drug to be just over 50% effective. The Chinese drugs are also less expensive than vaccines used in the U.S. and don’t require special refrigeration.
What’s Next: China is using Covid-19 vaccines as a carrot to strengthen its relationships with countries that can’t afford pricier vaccines. Earlier this week it announced plans to provide 10 million doses to developing nations. Similarly, Russia is aiming to boost production of its Sputnik V vaccine for use abroad.
Europe Moving Toward Vaccine Passport Scheme
A few European Union countries have taken steps to distribute special passes to allow citizens inoculated against the coronavirus to travel freely. Others, such as the UK., are considering such a measure.
- Denmark said Wednesday it would go ahead and develop by the end of the month a digital Covid passport that would help its citizens travel to countries requiring a vaccination, and also allow them to visit restaurants or attend mass events.
- Sweden also announced this week that it would launch such a pass in time for the summer season, if some form of international standard is in place by then.
- According to the Times of London, the UK.’s Foreign Office and the ministries of Transport and Health are preparing a certification system that would allow vaccinated British tourists to travel abroad this summer.
- Other European countries such as France and Germany have voiced their concerns about the so-called vaccine passport, on the grounds that it would mean special treatment for a privileged class of citizens—notably to the detriment of the younger population.
- Those concerns are likely to be dwarfed by the strong economic and business considerations. Tests are already required for cross-border travel in most of Europe, and vaccination passes would help the airline industry and major tourist destinations like Greece or Italy recover more quickly from the slump.
What’s Next: The opposition to vaccine passports—or whatever such certificates will be called—comes from countries that have been slow to vaccinate their population, like France. But it is unlikely to matter much: The matter is up to individual member states, and too many European economies depend on the quick resumption of tourism and travel.
Peloton Has First $1 Billion Sales Quarter; Can’t Keep Up With Demand
continued its run as one of the biggest winners of the new normal. It still can’t ship bikes fast enough to meet surging demand.
- Peloton topped $1 billion in quarterly sales for the first time during the fiscal second quarter. The company’s earnings and revenue topped analysts’ expectations.
- It ended the December quarter with 1.67 million connected fitness subscribers, up 134% year-over-year. Peloton’s latest outlook forecasts 2.27 million or more such subscribers, who pay about $40 a month, by the end of the June quarter.
- Management said during the company’s earnings call that it plans to delay the broad launch of its new, cheaper treadmill in the U.S. Peloton’s online store says the model will be on sale May 27. The Peloton Bike, Tread+, and Bike+ all advertise an eight to 10 week delivery window.
What’s Next: Amid pandemic-related shipping constraints and surging demand, Peloton said it will invest more than $100 million over the next six months in airfreight and expedited ocean freight to improve delivery windows.
Do you remember this week’s news? How well do you know your Wall Street history? Take our quiz below about this week’s news and an additional question to commemorate Barron’s turning 100 this year. Tell us how you did in an email to firstname.lastname@example.org.
1. In which right-to-work state will Amazon.com warehouse employees cast mail-in ballots over whether to organize into a union in what is expected to be a labor battle between the nation’s second-largest employer and its workers?
2. Treasury Secretary Janet Yellen called a meeting with the heads of several federal regulators this week to discuss last week’s market volatility brought on by the wild price swings in GameStop and other stocks. Which federal regulator was not present?
a. The Securities and Exchange Commission
b. The Federal Reserve
c. The Federal Reserve Bank of Chicago
d. The Commodity Futures Trading Commission
3. Which tech-titan CEO is stepping down later this year to become executive chairman as his company released another blockbuster set of results and solid guidance this week?
a. Jeff Bezos
b. Satya Nadella
c. Safra Catz
d. Mark Zuckerberg
4. This will be the first Super Bowl in 37 years without an in-game Budweiser commercial as its parent Anheuser-Busch InBev plans to instead use the ad money to support Covid-19 vaccine awareness. Other brands will also be missed, but there will be debuts of commercials from others including:
d. All of the above
5. Which oil major announced that it is forming a business unit that will focus exclusively on technologies to lower carbon emissions, as it faces increasing pressure to step up its sustainability investments?
b. Exxon Mobil
d. Royal Dutch Shell
100 Years of Barron’s
6. Clarence Saunders, founder of Piggly Wiggly grocery stores, patented which retail advance?
a. The cash register
b. The self-serving store
c. The paper shopping bag
d. The bar code
Answers: 1(a); 2(c); 3(a); 4(d); 5(b); 6(b)
—Pauline Yuelys and Kenneth G. Pringle
—Newsletter edited by Anita Hamilton, Stacy Ozol, Mary Romano, Matt Bemer, Ben Levisohn
Tag: Stock Market
Stock Market Analysis Today – What the Super Bowl Means for the Stock Market. It’s Not What You Think.