Welcome to Bespoke Brunch Reads — a linkfest of some of our favorite articles over the past week. The links are mostly market-related, but there are some other interesting subjects covered as well. We hope you enjoy the food for thought as a supplement to the research we provide you during the week.

Wartime Work: On February 9th, 1943, in the midst of World War II, President Franklin D. Roosevelt took decisive action to ramp up the nation’s industrial output. He signed an executive order mandating a minimum 48-hour work week in key war industries, ensuring that American factories could keep up with the relentless demand for weapons, ammunition, and military supplies. With millions of men fighting overseas, the government had already enlisted women, older workers, and even teenagers to fill gaps in the workforce. However, some industries were still struggling to meet quotas. While labor unions initially resisted extending workweeks, many ultimately accepted the decision as a necessary sacrifice for the war. Roosevelt’s directive was part of a broader wartime economic strategy that saw the US emerge as the “Arsenal of Democracy.” By the war’s end, America had produced an astonishing volume of planes, ships, and tanks, outpacing Axis powers and helping to secure victory.

AI & Technology

Elon Musk’s DOGE Is Working on a Custom Chatbot Called GSAi (WIRED)
Elon Musk’s Department of Government Efficiency (DOGE) is fast-tracking the rollout of AI across federal agencies, spearheading efforts to create “GSAi”, a custom AI chatbot for the General Services Administration. Part of Trump’s AI-first strategy, it would help automate government workflows, analyze massive procurement data, and boost efficiency. However, there are concerns over security risks and the rushed implementation. While Musk’s team initially considered using Google Gemini, they opted to build an in-house system instead. [Link]

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As Super Bowl LIX approaches, Americans are quickly finalizing party plans for Sunday, and this year’s spread of just 1.5 points suggests that Sunday’s game could come down to the final seconds. Not only is this year’s Super Bowl expected to be close, but it will also break what is a tie in each conference’s total number of Super Bowl wins at 29 each. In the early years of the Super Bowl, the AFC dominated, but a 13-year drought from Super Bowl XIX to Super Bowl XXXI put the NFC comfortably in the lead.

After Super Bowl XXXI, the NFC had won 7 more Super Bowls than the AFC, which was its widest ever margin. Since then, there has been much more parity between the two conferences where neither has seen a wide cumulative advantage.

Now for the important stuff. Which teams winning the Super Bowl have historically had the most positive and negative impact on the market? The table below lists every team that has won a Super Bowl (20) along with how many each team won and how the S&P 500 performed for the remainder of the year after each team won. With four championships up to this point, the Chiefs are tied with the Packers and Giants for fifth overall, but if they win Sunday, they will move into a tie with the 49ers and Cowboys for third place overall. The Eagles, meanwhile, are one of five teams with just one Super Bowl championship, and if they win on Sunday, they’ll join four other teams (Colts, Ravens, Rams, and Dolphins) with two each.

In terms of market performance, in the four prior years when the Chiefs won, the S&P 500’s average performance for the remainder of the year was a gain of 12.4% with positive returns 75% of the time. Regarding the Eagles, their only win was in Super Bowl LII in February 2018. After that win, the S&P 500 fell by over 9% through year end. Unfortunately, this year’s game isn’t between the 49ers and the Steelers. Both teams have won at least five Super Bowls over the years, and the S&P 500 has traded higher for the remainder of the year after every one of their wins!

In addition to looking at market performance following which team wins the Super Bowl, we also looked at forward returns following different scenarios in the game. While the S&P 500 has rallied an average of 12.4% after the Chiefs won the Super Bowl, after their two losses, the S&P 500 rallied an average of 18.4%! Overall, though, the best scenario for a bull is a high-scoring game. As shown in the chart, in years when the loser scores at least 28 points, the winner scores at least 35, the total is at least 60, or it’s a blowout (21+ points), the S&P 500’s average rest of year gain has been at least 10%. Conversely, in those years when the total is less than 31, the winner scores less than 21, or the loser scores less than 8, the average rest-of-year performance for the S&P 500 was +5.7% or less.

It should go without saying that the score of the game or even who wins has zero impact on how the stock market will perform for the remainder of the year, but some of these online betting platforms have some even crazier bets people can make.  At least these figures will give you something to talk about if the game or commercials start to get boring!  Enjoy another Super Bowl Sunday!