World cup good for stocks?

The World Cup in the past has been shown to alter trading behaviour significantly, so what can be expected from Qatar?

Scheduling matters

In the past, when a national team was playing in the world cup, trading volume decreased by over half. Even in the United States, which pays more attention to a different kind of football, trading volume dropped 43% while the country's team was playing. Considering that the US accounts for over half of the world's global equity trading, that could impact markets in general. Usually, the World Cup offers a lot of opportunities for companies in the host country. The last time it was held, in 2018 in Russia, it's estimated $14.2B was spent. With people travelling from all over the world, usually, this would be a boon for airlines, hotels and restaurants. But in Qatar's case, a lot of the infrastructure is government owned. While that benefits some international chains such as Marriott and Hilton, Qatar Airlines is government-owned.

Some unexpected stock movers

One of the sectors that often gets a boost during the World Cup is UK pubs, as people go to get a pint while watching their preferred game. However, with the timing of the cup in the fall and games scheduled later in the day while the cost of living rises, pubs are worried that they won't see much of a boost this time around. That includes Mitchells and Butlers as well as Wetherspoon and Whitbread.

After losing its key branding partner Ye, Adidas needs a boost to its advertising to gain back some market share. Fortunately, it's a partner in this year's World Cup. In past additions, the company saw sales jump by 10% (2018) and 8% (2014) in the quarter that the cup was held. Naturally, the stock price reacted positively as well. Though with the controversy surrounding the host country's treatment of workers, the positive image results might not be as strong this time.

ADIDAS in flag-like consolidation

Adidas appears to be on the rise as prices experience a bearish consolidation phase similar to a flag pattern. Breaking above the descending channel originating at the 137.00 might offer bulls an opportunity at 150.00 (R1), with rising momentum bringing 180.00 (R2) in focus. If bears penetrate the swing low of 127.00 the prices might encounter a pullback to 120.00 (S1), which is going to increase the chances of extending losses to 100.00 (S2).

Key takeaways

The World Cup has been shown to alter trading behaviour in the past significantly, and this is expected to continue in Qatar. Usually, the World Cup provides a lot of opportunities for businesses in the host country, but this may not be the case for Qatar due to its government-owned infrastructure. Adidas is a partner in this year's World Cup and has reacted positively so far, but sales results might not be as strong as in 2014 and 2018.