Yesterday the final of Euro 2024 he saw the Spain raise the cup and officially become champion of Europe. But will it also be a victory on the stock market? Uefa European Championship has, in fact, a significant impact on the economy of the host country and can also have positive effects on the winning country. In general, events such as the FIFA World Cup or the European Championship attract considerable attention and generate victories not only on the pitchbut often also on the markets.
The last two decades – explain analysts of Freedom24, international online brokerage firm – have shown that even winning the European championships can give a boost to the titles listed in the country of the winning team. According to Freedom24 estimates, in the last five tournaments, Greece and Spain outperformed the pan-European index STOXX 600 after the victories of 2004, 2008 and 2012, while only Portugal’s victory in 2016 showed a significant delay. The Greek stock market was in 20% up six months after victory of 2004, long before the start of the country’s debt crisis.
If we look at the historical trends– explain the analysts of Freedom24 – we see that the stock market of the country that won the world Cup usually exceeds the world market 3.5% in the following month in the final. All World Cup winners since 1974, with the exception of Brazil in 2002 (whose crisis caused the stock market to decline by 19%), have experienced short-term stock market outperformance.
“Generally speaking, in the absence of a major economic crisis, the country that wins the European Championships usually sees a short-term rebound in its stock market after its success. Historical data suggests a short-term recovery after victories in major tournaments, but this effect tends to fade over time, as broader economic factors often have a greater impact. The advantage actually diminishes significantly after three months. Ultimately, while positive sentiment can support markets in the short term, The winning country’s stock market usually loses about 4% the following year” explained Francesco Bergamini, Head of Freedom24’s Representative Office in Italy.
Over 30 years of industry analysis
The trajectory of the revenues developed by the UEFA European Championships from 1992 to 2021 outlines a picture of sustained growth and commercial success. Over the years, the event has been able to generate a ever-increasing induced income, going from 40 million in 1992 when Sweden hosted the championship to the impressive figure of 1,882.5 billion euros in 2021. Investments in infrastructure such as stadiums, transport and accommodation stimulate various sectors, including construction, tourism and hospitality. The organization of Euro 2016 in France, for example, directly contributed 1.22 billion euros to GDP. During Euro 2012 in Poland and Ukraine – explain analysts at Freedom24, an international online brokerage company – the number of tourists visiting Poland increased by 15% compared to the previous year.
2024 Championship in Germany: 2 Billion in Benefits
Europe’s largest economy should grow by about 0.3% this yearmore slowly than other major industrialized countries, but Euro 2024 could provide a short-term boost. The championship is expected to generate more than 2 billion euros in benefits cheapwith tourism and hospitality set to make a significant contribution. According to the Institute for Economic Research (IFO) of Monaco, one billion euros will be generated by foreign tourists who come to the country to see the matches.
Stocks that could benefit
Nike (NKE) – As a Sponsor and supplier sports equipment leaderNike will be able to achieve an increase in sales and brand visibility. Overall, the sportswear market, valued at around $200 billion a year according to Statista, is forecasting a potentially record-breaking year in 2024.
Airbnb (ABNB)– Its business model has proven to be extremely profitable: in 2023, Airbnb generated a sales of $9.9 billion, more than double than 2019The company sees significant growth potential, especially in the extended-stay market: those of 28 days or more accounted for 17% of nights booked in the first quarter.
Booking Holdings (BKNG) – After the hard blow inflicted by the pandemic, the company has recovered and surpassed the results obtained before the arrival of Covid 19. In 2023, in fact, it achieved a 25% increase in turnoverreaching $21.4 billion. Booking Holdings’ first-quarter report for fiscal 2024, which points to a strong recovery and growth trajectory, beat expectations for both revenue and earnings.
Alphabet (GOOGL)- The company has seen a strong 15% revenue growth in the first quarter of 2024, driven in part by YouTube advertising revenue, which increased by 21%. Further growth is expected in the second half of the year, driven by the 2024 Summer Olympics, EURO 2024 and the US presidential election.