Unveiling the Financial Impact of Euro 2024 and Copa America Finals: How Winning Could Boost Stock Markets
By Marc Jones
London (Multibagger) - As the anticipation builds for Sunday's Euro 2024 final between England and Spain, and the Copa America showdown between Argentina and Colombia, investors might want to keep a keen eye on the potential market impacts. Historically, victorious nations in major football tournaments often see a substantial boost in their stock markets.
Historical Market Performance Post-Euro Championship Wins
Analyzing the last six Euro Championship winners, we observe a compelling trend. Nations like Greece, Spain, and Italy have historically outperformed the pan-European STOXX index after their respective victories. For instance:
- Greece (2004): Following their unexpected triumph, the Athens market surged ahead of the STOXX by an impressive 20% over the next six months.
- Spain (2008 & 2012): Despite the global financial crisis, the Spanish stock market outperformed the STOXX by losing 5% less in 2008 and later, in 2012, outpaced the STOXX by around 4%.
- Italy (2021): The Italian market also showed resilience, outperforming the STOXX by approximately 4% post their win.
The Messi Factor and Copa America
The Copa America final, featuring Lionel Messi's Argentina against Colombia, promises excitement both on and off the field. Historical data suggests that Copa victories also positively impact stock markets:
- Argentina (2021): After their first major title in 28 years, Argentine stocks outperformed MSCI's pan-Latam index by nearly 50%.
- Brazil (2019): Brazil's market saw a 9% outperformance post their victory.
Impact on Currencies
Interestingly, while stock markets tend to thrive post-victory, currencies often don't share the same fate. Deutsche Bank's analysis before the last Euros final revealed that the British pound had consistently declined during each major competition England qualified for. However, this year's 1.1% gain might signal a shift, potentially influencing England's fortunes in Berlin.
Breaking It Down for Beginners
What This Means for You
- Stock Market Gains: If your country wins a major football tournament, historical data suggests that your national stock market might outperform others in the following months. This could be a good time to invest in local stocks.
- Currency Movements: Despite stock market gains, your national currency might not perform as well. This could affect the value of your savings if they're held in foreign currencies.
- Financial Planning: Understanding these trends can help you make more informed decisions about where and when to invest, potentially improving your financial health.
In summary, the financial markets often react positively to national sports victories, providing unique investment opportunities. By staying informed and leveraging historical trends, you can potentially enhance your financial portfolio in the wake of major sporting events.