SOCCER: The 4-yearly World Cup starts Sunday. Nearly half the world’s population will watch. It’s a $30 billion industry in Europe alone (see chart). And could impact your portfolio in 5 ways:
STOCKS: A number of global heavy-weight stocks will be in particular focus as World Cup partners (like KO, V). Or set to benefit from any pickup in related consumer spending, from sports apparel (NKE, ADS.DE, PUM.DE) through to brewers (ABI, HEIA.NV, CARLB.CO).
CONFIDENCE: There is historic evidence that winning or losing games can impact individual stock market performance, trading liquidity, and consumer behaviour. This could be heightened now with 1) the current consumer cost-of-living crisis and 2) the big Christmas spending timing.
SEASONALITY: This is the first World Cup not held in the weak stock market seasonality of the summer. But now in the typically strongest S&P 500 performance months of year. The 2018 Cup saw 3.1 billion viewers, near half the global population. This could be a stock market distraction.
ENERGY: Qatar is not only the World Cup host but also heating the homes of many watching around the world. With Australia it’s the world’s top LNG exporter, along with its biggest partner XOM. LNG is 85% of its exports and brought in $55 billion of revenue in the first half of this year.
GCC: Middle Eastern stock markets are only 1% of global market cap. But are among the best performers this year, and with 10-yr average returns above global equities. Benefited from high energy prices, US$ currency pegs, and $200 billion of Qatar World Cup infrastructure spend.
All data, figures & charts are valid as of 15/11/2022