If the Philadelphia Phillies win the World Series, prepare for an economic crisis

The Philadelphia Phillies are in the World Series. Hold on to your wallets.

When Philadelphia baseball teams do well, in a pattern that has held for a century, financial markets tend to strike out. It started with the old Philadelphia Athletics (before they left town). Their 1929 championship preceded the stock crash and Great Depression. In 1980, the Phillies won their first World Series, and a recession raged right through 1983, when the team again got to the final round and lost. The Phils won the World Series a second time in 2008, and boom: a home-run financial crisis.

Now, the scrappy Phils will be back on the big stage against the favored Houston Astros, and it is as if this struggling economy already knew it was going to be in trouble.

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"The Astros must save America’s economy," tweeted one follower of the finance-focused Morning Brew newsletter, which commented on the historical phenomenon in September, even before the Phillies had made the playoffs. Another lamented the Phillies’ victory on Sunday over the San Diego Padres, which vaulted them into the World Series: "PADRES COULD HAVE STOPPED THE INCOMING RECESSION."

Of course, this analysis has as much scientific basis as the team’s claim that the Phillie Phanatic mascot is a large flightless bird from the Galápagos Islands.

But investors, especially in rough markets, like to think there is dark magic causing their pain (rather than simply the fundamentals of the economy or their bad bets). And sports fans don’t mind anything that seems to throw a little cold water on Philadelphia. So now, we have the Phillies Indicator.

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In 2008, when the Phils were on their way to a championship, the Philadelphia Inquirer wondered if a victory could be a "harbinger of economic doom." Locally based analysts at serious-minded Moody’s Economy.com postulated then that the team’s success could be a "leading economic indicator."

Mark Zandi, chief economist at what is now called Moody’s Analytics, speculates that because the Phillies have won the World Series so few times, when they do, "It is clear something is off the rails in the cosmos." As a Philadelphia native, he says he will cheer a Phillies championship, "but I will also be buckling in."

Morning Brew tweeted about the Phillies quirk on Sept. 21, then revisited the topic as the team continued to win. Neal Freyman, its managing editor, says he knew the thing had traction when his mother called, reporting that the topic was just brought up at a business meeting by colleagues, unaware that her son gets some of the credit/blame.

In sports and markets, he says, "A lot of people are superstitious and like to cling on to narratives and try to explain the unexplainable."

What does Citizens Financial Group Inc. think? The Phillies’ stadium, Citizens Bank Park, is named after its retail banking arm. Might winning at baseball mean losing at finance?

"Coincidences are interesting, but sliding into a possible downturn has nothing to do with the Phillies," says Bruce Van Saun, chairman and chief executive officer of Citizens, after praising the team’s grit. "We look forward to hosting a World Series victory while continuing to root for our economy."

The Phillies declined to comment. (Baseball teams get superstitious during a positive run.)

Sam Stovall, chief equity strategist at investment-research firm CFRA Research in New York, notes there is a reverse correlation here. Phillies pain might mean stock gains. The markets did well, rising 14.6%, in 1964—that awful baseball year for Philadelphia when the team blew an almost-sure berth in the World Series, scarring a generation of fans.

Mr. Stovall has a soft spot for fanciful indicators. His late father, Robert Stovall, popularized the Super Bowl Predictor, which predicts a given year’s stock market based on results of the Super Bowl. Stocks seem to go up for the year when an original National Football League team wins, and down if the winner is originally from the old, premerger American Football League (which is why the many wins by the New England Patriots are bearish for stocks).

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The indicator hasn’t worked as well in recent years, but it nonetheless has been right after 41 of the 55 Super Bowls, a 75% rate. That is better than a lot of economists’ predictions.

If so, Philadelphia’s other winning sports team, football’s Eagles, might also have a say in the markets.

The Eagles, currently 6-0 and the NFL’s only undefeated team, have been to three Super Bowls in their history: 1981, 2005 and 2018. The first two times, they lost to an original AFL team, and the Dow dutifully fell, so the Predictor worked. Then again, when the Eagles finally won in 2018, which indicated the market would rise, stocks ultimately fumbled.

Phillies supporters, meanwhile, think the team should keep winning without apology.

Ruben Amaro Jr., a former Phillies player and general manager, now a baseball commentator, says, "The world needs Phillies joy in times of financial stress."

Memo to Houston: Don’t sneer too much at Philadelphia’s history with predicting financial crises. Investors can’t forget that the World Series starts Friday at an Astros ballpark that was once named Enron Field.