Don't put too much stock in these indicators

Thursday, February 1, 2018

The booming stock market hit a bump this week on news that disruptive retailer Amazon was joining with Warren Buffett’s Berkshire Hathaway and JP Morgan Chase to form a healthcare company designed to hold down costs for their employees.

While long-term consequences of the move are unknown, we should have a good idea for the future of the stock market after Sunday.

Even if you hate the New England Patriots, you should be rooting for Tom Brady, since he’s provided the most accurate economic forecast since joining the National Football League.

Two years, 2000 and 2008, were the two of the worst years for the U.S. stock market in decades — a 10 percent decline in the S&P 500 in 2000 and 36 percent in 2008.

He missed a game in 2001, another bad year, and there was a 3 percent decline when “deflate-gate” saw Brady suspended for four games.

Since Tom Brady began his career in 2000, the S&P 500 has climbed nearly 100 percent.

But it’s not all football.

Barry Glassman of Forbes Magazine says there are some other economic indicators to watch:

* Attractive servers in restaurants. Hugo Lingren of New York created the “Hot Waitress Economic Index” in 2009, which theorized that good-looking people tend to find higher-paying jobs when the economy is strong.

* Colorful ties in narrower widths are more popular in good times; wider, darker ones in bad times.

* Lipstick and nail polish sales surge in a bad economy as consumers look for an affordable way to splurge.

* The “hemline theory” started back in the 1920s when women tended to wear shorter skirts when they could afford fancy stockings; longer skirts when they couldn’t afford them.

* Men’s underwear was a popular signpost for Federal Reserve Chairman Alan Greenspan, who believed a drop in sales of non-luxury items indicated hard times ahead.

* Sales of cardboard boxes — many of them with the Amazon logo printed on the side — have become a way of predicting retail sales.

* Champagne sales spike when people are feeling euphoric, according to a study by NPR, and decline soon after that.

* McDonald’s Big Mac sandwich is used to measure global currencies — if a Big Mac costs less in China than in the U.S., for instance, it may mean the yuan is undervalued compared to the dollar.

* When the Sports Illustrated cover model’s nationality is American, the S&P 500 tends to generate a return above its historical rate, while a non-American cover model sees it go lower.

But don’t bet the farm on the lists above. Despite Tom Brady’s record, since 2000, the stock market has actually done better when NFC teams like the Philadelphia Eagles win — not the Patriots’ AFC.

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