Now it’s official. Groundhog Punxsutawney Phil came out of his hole in a small town in Pennsylvania and didn’t see his shadow this Friday (2). According to tradition, which began in 1887, this means that the beginning of spring will be brought forward. Incredible as it may seem, this could give US markets some boost.
Even without empirical proof that the animal’s predictions are valid, serious research shows that there is an anomaly generated by the date, since investors tend to be optimistic when Phil points out that the coldest season will end earlier in the year.
Harvard Business Review last year interviewed researcher Savva Shanaev, from Northumbria University, who together with two colleagues mapped a century of US stock market returns against Punxsutawney Phil’s annual forecasts.
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Shanaev said he found no statistically significant changes after a forecast of a long winter, but said the market appreciates 2.78%, on average, after a forecast of a faster start to spring.
This, he says, is more likely because early spring forecasts are much rarer, occurring only once every four years on average. Therefore, investors react more strongly to these predictions.
But the groundhog makes more mistakes than it gets right. A Associated Press points out that a government meteorological agency compared Phil’s predictions with US national temperatures from the previous decade and concluded that he was right only 40% of the time.
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In Brazil, Groundhog Day is famous because of the film Time Spell, from 1993, in which actor Bill Murray plays a TV reporter hired against his will to cover the groundhog forecast and becomes inexplicably trapped in a time loop that makes him relive the same day over and over again. Hence the expression “Groundhog Day” for situations that recur.