Key Takeaways
The McRib is coming back. Does that mean it's time to buy stocks?
Last month, McDonald's ( MCD ) announced that its famed rib-shaped pork sandwich would return for its recurring limited run starting Tuesday. The promotion typically boosts sales for the fast food giant due to the dish's scarcity—but the historical performance of the S&P 500 during "McRib SZN" implies the sandwich's return also bodes well for stocks.
So does a fast-food pork sandwich deserve mention in the same breath of other stock-market phenomena like the " Santa Claus Rally " and " Sell in May and Go Away? "
What Is the 'McRib Effect?'
Between 2010 and 2023, the S&P 500 had an average daily return of 0.1% when the McRib was available, compared with 0.04% on days it wasn't, according to Nick Maggiulli, COO of Ritholtz Wealth Management.
Maggiulli first calculated "The McRib Effect" in 2018, when he found that the S&P 500 outperformed by an average of 7 basis points—a basis point is a hundredth of a percentage point—when the McRib was available between 2010 and 2017. On an annualized basis, that implied a full 19 percentage points of outperformance.
The severity of the outperformance has fluctuated over time, shrinking to 5 basis points in 2020 and touching 6 basis points last year.
Some have observed a similar phenomenon with bitcoin ( BTCUSD ), the price of which has risen more often than not while the McRib has been available. (Bitcoin climbed last November as the McRib hit McDonald's menus and financial markets buzzed with anticipation of the approval of spot Bitcoin ETFs.)
The Limits of the 'McRib Effect'
Maggiulli explored the McRib Effect in 2018 as a way to illustrate the statistical principle that
correlation
does
not equal causation
. As Maggiulli points out, the movement of the stock market is determined by simultaneous decisions made by millions of people, not one single factor—like the availability of the McRib.
Indeed, the McRib tends to be re-introduced in the last months of the year, historically an auspicious time for the stock market.
Stocks are a risky investment by nature, which is why it is important to evaluate many different factors when investing in a specific company or a fund that tracks an index like the S&P 500 rather than a single factor—like whether or not a favorite limited-time sandwich is on the market.
Even if you really, really like that sandwich.
