Wall Street loves a good narrative, but it turns out the best market predictor might not be a Fed chair—it might be a stable.
As Tuesday marks the beginning of the year of the Horse, investors are leaning into a quirky but historically consistent trend: the Chinese Zodiac’s four-legged alpha.
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The Four-Legged Factor
Data suggests that the stock market has a distinct preference for animals that walk on all fours, as Ryan Detrick, chief market strategist at Carson Group, highlighted on X.
According to historical S&P 500 performance data, the Horse, Goat, Ox, Pig and Dog represent the strongest performing years in the 12-year cycle.
Conversely, two-legged signs—the Rooster and the Monkey—have historically sat at the bottom of the returns pile.
Historically, Horse years have delivered double-digit gains, fueled by the galloping energy the sign represents.
There is a humorous irony in the fact that the most bullish years come from animals with four legs, while years represented by animals with two legs or no legs tend to struggle.
Nvidia Corp. (NASDAQ:NVDA) CEO Jensen Huang recently noted that the Horse is synonymous with speed, strength and forward momentum.
“This year is the year of the Horse. So, it’s going to be a very good year,” Huang said.
Animal Spirits
While serious analysts point to interest rates and earnings, the Zodiac effect taps into a psychological phenomenon.
When a tech titan like Nvidia’s Huang aligns a company’s outlook with cultural symbols of prosperity, it bolsters sentiment, and believing the year of the Horse will be profitable can become a self-fulfilling prophecy in a market ruled by animal spirits.
Photo: Shutterstock
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