In World Cup, to victor go the stock market spoils – CNBC.com
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While it may sound like just one of those silly coincidences, like cycles of the moon or the ever-popular hemline indicator, the World Cup connection has been remarkably consistent when comparing individual country stock market movement with the MSCI World Index.
Since 1974, all the winners except one have outperformed in the month after the final. The only exception was Brazil in 2002—perhaps an ominous sign since the nation’s squad is a heavy favorite to take this year’s Cup. In that year Brazil, the host of this year’s games, was in the midst of a brutal recession and currency crisis that skewed the results.
One other thing to keep in mind: The runner-up in the championship match has had poor performance afterward, with seven of the nine countries finding themselves on both the losing end of the game and on market action. Underperformance compared to the MSCI for the runner-up averages 1.4 percent for the first month and 5.6 percent over the ensuing three months.
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As Goldman notes:
So, in the absence of a severe economic crisis, the winner tends to enjoy the spoils of success in the market for a brief period at least.
Not so much, though, for the loser.
—By CNBC’s Jeff Cox
Continued:
In World Cup, to victor go the stock market spoils – CNBC.com
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