HFM information and reviews
HFM
96%
Octa information and reviews
Octa
94%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
Vantage information and reviews
Vantage
85%

FIFA World Cup Trading 2022: How It Correlate With The Stock Market


2 December 2022

The 2022 Soccer World Cup in Qatar has just kicked off and is guaranteed to be the sole focus of attention for millions of people around the world for its four-week duration. Although this is a sporting event that would on the surface appear to be completely unlinked to financial markets, there are several studies that suggest that the results of World Cup matches can influence price action and provide investors with opportunities to profit. Moreover, there are several brands and companies that are taking advantage of the viewership the event will get by partnering with FIFA as major sponsors, enabling them to create a strong branding presence across the tournament’s physical and digital assets.

This article will look at impact of previous world cups on financial markets, major sponsors to keep an eye on and what both winning and losing can mean for an individual country’s stock market.

World Cup Result Impacts on Stock Markets

One of the major findings from a body of research conducted two decades ago shows that a country’s stock market may underperform following the national team’s ejection from the World Cup. The research study titled “Sports Sentiment and Stock Returns” analysed over 1,000 different matches going back to 1973 and found that, on average after a given country’s football team lost in the World Cup, its stock market produced a significantly below average return the very next trading day. This is hardly surprising given how dejected and disheartened a country’s investors would be following such a disappointing result.  

A prime example is the performance of the French CAC 40 Index following France’s penalty shootout loss to Italy in the 2006 World Cup Final. The index fell just shy of 5% in the week after the result as the nation mourned its heartbreaking defeat.

CAC 40 Plunges after France Loses 2006 World Cup Final

The German DAX index also suffered following the national team’s defeat in the 2002 World Cup Final against Brazil in Japan. The national benchmark index declined 6.3% in just three days after Germany lost 2-0 to an all-time great team in Brazil in Yokohama, Japan.

DAX 30 Slides Lower after Germany Loses to Brazil in 2002 World Cup Final

Underperformance of national stock markets are not just isolated to losses in World Cup Finals, however, as can be seen with the FTSE 100’s slide following England’s semi-final loss to Croatia at the 2018 World Cup in Russia. This is an interesting relationship to keep an eye on throughout the tournament in Qatar, especially if there are any shock knockouts in the group stages and latter parts of the competition. A disappointing result by any of the strong European countries could see their national stock index sell-off dramatically in the days after.

Major Sponsors to Keep an Eye On

There are several major sponsors that traders should keep on their watchlists throughout the Qatar 2022 World Cup, should the prominent display of the company’s branding provide a tailwind for its stock price.

Adidas (XETR: ADS)

The German sport and footwear behemoth has been a major partner of FIFA and provided the Official Match Ball for the World Cup since 1970. The firm also provides uniforms for all FIFA officials, referees, volunteers, and ball boys providing them the ability to be font and centre throughout the competition. Adidas’ share price has trended considerably lower since peaking at a record high of €336.26 in August of 2021. However, the share price has stormed higher since the start of this month and looks poised to continue climbing as a Bull Flag forms just below resistance at €138.50. A break above could precipitate a new bull trend and bring the August highs into focus.

Coca-Cola (NYSE: KO)

Coca-Cola has also held a long-term sponsorship agreement with FIFA, becoming an official sponsor of the World Cup in 1978. Since 2006, the company has also been a major sponsor of the world ranking for both the men’s and women’s national teams and releases both physical and digital stickers for FIFA World Cup tournaments.Given that Qatar has strict rules regarding consumption of alcohol, Coca-Cola may enhance its reputation as a beverage catering for everyone and could receive a nice bump in short-term revenues. Technically, the picture is slightly bleaker as price forms what can only be described as a lower high of a bearish downtrend. A break below $60 would probably intensify selling pressure and precipitate a decline back towards the yearly lows set in October. 

McDonalds

The fast-food giant has sponsored the FIFA World Cup for twenty years and has its branding prominently featured on the uniforms of the child mascots who walk out with the players prior to kickoff. The firm was also the primary sponsor of the tournament’s fantasy football game in 2018. ut of the three sponsors listed, McDonald’s price chart appears to be the most bullish as price consolidates above its prior record high carved out December of 2021. Remaining positively positioned above prior resistance-turned-support at the August high ($268) could see MCD surge to fresh record-highs in the weeks ahead.

Trade as You Watch the World Cup with Vantage

Take advantage of the opportunities that may present themselves in financial markets during the Qatar 2022 World Cup with Vantage! You can trade the largest stock market indexes in the world with low spreads and rapid-fast trade execution. Vantage also provides traders with the ability to capitalise on the moves of some of the biggest companies in the world with its share CFD offering. To learn more about Vantage and how you can open your very own trading account, click here!

#source

Share: Tweet this or Share on Facebook


Related

Dollar eases from highs as intervention warning props up yen
Dollar eases from highs as intervention warning props up yen

Intervention threat spurs mild rebound in yen after top currency official's warning. Yuan also rebounds, triggering broader retreat in US dollar. Stock market rally cools amid quieter week before Easter break, core PCE eyed.

25 Mar 2024

Stocks power to new records despite hot US inflation
Stocks power to new records despite hot US inflation

US inflation comes in hotter than expected, but markets brush it off. Dollar unable to gain much, equities close at new all-time highs. Gold hit by profit taking, yen soft even as BoJ speculation heats up.

13 Mar 2024

All eyes are on the strongest Cryptos
All eyes are on the strongest Cryptos

The crypto market continues to rise, adding 2.3% to the level of 24 hours ago. Bitcoin's capitalisation has surpassed 1 trillion, and its share of all coins is estimated at 52.5% by CoinMarketCap. The increase in share is due to USDT and the relative stagnation of the share of other cryptocurrencies outside the top five.

15 Feb 2024

Bitcoin Completes Consolidation and Rushes to the High
Bitcoin Completes Consolidation and Rushes to the High

The crypto market made an impressive move higher, rising 3.4% in 24 hours to $1.71 trillion. The rise to its highest level since 12 January came as the S&P500 and Nasdaq-100 indices hit all-time highs.

8 Feb 2024

Ethereum Unveiled: A Deep Dive into its Functionality and Significance
Ethereum Unveiled: A Deep Dive into its Functionality and Significance

In the ever-evolving landscape of blockchain technology and cryptocurrencies, Ethereum stands as a pivotal player, heralded for its decentralized global software platform and its native digital currency, ether (ETH)....

26 Jan 2024

Bitcoin halving 2024: What to expect?
Bitcoin halving 2024: What to expect?

BTC halving will occur when the number of blocks reaches 840,000 in April 2024. Then, the reward per block will decrease from 6.25 to 3.125 BTC...

25 Jan 2024


Editors' Picks

The Top Forex Expert Advisors 2024: Performance, Strategy, and Reliability Review

An annual roundup reviewing the most successful Forex Expert Advisors (EAs) based on their performance, strategies employed, reliability, and user feedback. This piece would provide insights into which EAs have been market leaders and why.

The Evolution of Forex Expert Advisors: Navigating the Path of Technological Revolution

The concept of automated trading has been around for decades, but the accessibility and sophistication of Forex EAs have seen significant advancements in the past few years. Initially, automated trading systems were rudimentary, focusing on simple indicators like moving averages.

The Impact of EAs on Forex Trading: A Double-Edged Sword

By enabling continuous, algorithm-based trading, EAs contribute to the efficiency of the Forex market. They can instantly react to market movements and news events, providing liquidity and stabilizing currency prices through their high-volume trading activities.

MultiBank Group information and reviews
MultiBank Group
84%
XM information and reviews
XM
82%
FP Markets information and reviews
FP Markets
81%
FXTM information and reviews
FXTM
80%
AMarkets information and reviews
AMarkets
79%
BlackBull information and reviews
BlackBull
78%

© 2006-2024 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.