A Look at the World Series and the Stock Market
By: Michael Flannelly · November 01, 2022 · Reading Time: 5 minutes
Foul Ball?
The World Series is currently underway, with the American League champions Houston Astros facing the National League champions Philadelphia Phillies in the Fall Classic. For the Astros, it is their fourth appearance in the World Series of the last six contests; the Phillies are making their first appearance since 2009.
Many market watchers have noted that in previous years when a Philadelphia team – either the Phillies or the Athletics – won the World Series, it was in years of economic turmoil; the Great Recession of 2008, a recession and high inflation during 1980, and the Great Depression in 1929 and 1930. So, the current World Series match-up has caused investors to look for any relationship between the winner and how it may impact the direction of the stock market and the economy.
Unconventional economic indicators like this are fun to analyze, but just because there is a correlation does mean that they can predict the stock market’s performance. Nonetheless, let’s look at the history of World Series winners and stock market returns.
World Series History
The 2022 World Series is the 118th edition of Major League Baseball’s championship series. The inaugural World Series took place in 1903, and subsequent series have occurred every year except 1904 and 1994.
Of the previous 117 World Series, the American League has won 66 titles, with the National League winning 51 championships.
The New York Yankees of the American League have won the most championships, taking home 27 titles. Behind the Bronx Bombers, the National League’s St. Louis Cardinals have won 11 titles, followed by eight wins by the Boston Red Sox and Philadelphia/Oakland Athletics, both of the American League.
Does the World Series Winner Affect the Stock Market?
In the years following a win by a National League team, the stock market seems to perform slightly better than the years following a win by an American League team. But that does not mean that the World Series winner affects the stock market’s performance; it’s more of a coincidental relationship.
Since 1957, when the S&P 500 Index was established, the benchmark index has increased an average of 15.09% annually in the year following a win by a National League team. In contrast, the S&P 500 rose an average of 8.69% in the year following a win by an American League team.
However, in the past ten seasons, the difference in stock market performance has narrowed. Since 2012, National League teams have won six World Series; in the years following those wins, the S&P 500 rose an average of 13.99% annually. In the four years following a win by an American League team, the S&P 500 rose by an average of 13.07% annually.
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| A Look at the Past 10 World Series | |||||
|---|---|---|---|---|---|
| Year | World Series Winner | League | World Series Loser | League | S&P 500 Total Return in the Following Year |
| 2021 | Atlanta Braves | NL | Houston Astros | AL | -17.7%* |
| 2020 | Los Angeles Dodgers | NL | Tampa Bay Rays | AL | -28.47% |
| 2019 | Washington Nationals | NL | Houston Astros | AL | 18.02% |
| 2018 | Boston Red Sox | AL | Los Angeles Dodgers | NL | 31.21% |
| 2017 | Houston Astros | AL | Los Angeles Dodgers | NL | -4.23% |
| 2016 | Chicago Cubs | NL | Cleveland Indians | AL | 21.61% |
| 2015 | Kansas City Royals | AL | New York Mets | NL | 11.77% |
| 2014 | San Francisco Giants | NL | Kansas City Royals | AL | 1.38% |
| 2013 | Boston Red Sox | AL | St. Louis Cardinals | NL | 13.52% |
| 2012 | San Francisco Giants | NL | Detroit Tigers | AL | 32.15% |
| *As of Oct. 31, 2022 | |||||
| Sources: Baseball Reference; Aswath Damodaran, NYU Stern School of Business | |||||
Astros and Phillies
Let’s look at the current World Series match-up and how each team has performed in the World Series.
Though the Houston Astros have been to five total World Series, they have only won the Fall Classic once in 2017. In 2018, the year following the Astros’ World Series win, the S&P 500 declined by 4.32%. In contrast, the S&P 500 has increased an average of 5.31% annually following an Astros loss in the championship series.
The Philadelphia Phillies have been to eight World Series, winning in 2008 and 1980. In the years following a Phillies title, the S&P 500 increased 25.94% in 2009 and declined 4.70% in 1981. In the years following a Phillies loss in the World Series, the S&P increased an average of 7.43% annually.
The Takeaway
While it’s fun to look at unusual market indicators like World Series winners and their impact on the stock market, investors shouldn’t put too much emphasis on them. Just because the stock market has performed better in the years following a win by a National League team, it doesn’t mean this is a significant predictor of stock prices. Most analysts prefer to analyze fundamentals like earnings and economic growth to forecast the direction of the stock market.
It goes without saying that you shouldn’t develop an investment strategy based on the winner of the World Series. But if you want to build a financial portfolio based on your preferred investment strategy, SoFi can help. With a SoFi Invest® online brokerage account, you can create a portfolio of stocks, exchange-traded funds (ETFs), and cryptocurrency with no commission for as little as $5.
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