Listless Nikkei

On 24 July 2020 the Olympic Summer Games will begin in Tokyo, the capital of Japan. Olympic Games and Soccer World Cups are among the largest sporting events in the world.  Do you perhaps also think that these events may affect the performance of local stock markets?


Olympic Summer Games 2020 – official logo (left), and a fan-made logo (right) by designer Daren Newman [PT]


Let us examine whether and in what way such major sporting events impact the stock markets of host countries. As the chart below shows, lately the performance of Japan’s Nikkei 225 Index was not exactly convincing. Could it be that this is soon going to change?


Nikkei 225 Index, 2014 – 2019


The Nikkei’s performance over the past two years has been disappointing.

Source: Comdirect


Generating a Comprehensive Picture with a Large Number of Sporting Events

Soccer World Cups and Summer Olympics take place every four years, staggered by two years. In order to achieve higher statistical significance, these two large sporting events are examined together.

Since 1960 15 Olympic Games and 15 Soccer World Cups have been held. Daily stock prices of the host country markets are available for 22 out of these 30 sporting events. The 2002 Soccer World Cup was hosted by both South Korea and Japan, i.e., it took place in two countries. By using the stock prices of both countries in this case, we can examine the average performance of 23 markets for our study.

The table below shows an overview of all Summer Olympic Games and Soccer World Cups since 1960. It also indicates whether the relevant stock market prices are available.


Summer Olympics and Soccer World Cups since 1960


Since 1988 the stock prices of all host countries are available.

Source: author’s own diagram

We have used US dollar-denominated country indexes for the study, as some local currencies are quite volatile. In short, we have adopted the perspective of an international investor.


Averaging Provides Clear-Cut Information

To examine the impact of these major sporting events, we look at the trend of stock prices around the events. A specific temporal anchoring point is needed, as the events take place at different times of the year (between the end of May and the beginning of October). We use the beginning of the sporting events as the fixed point in time around which we perform the analysis.

In the next step, we average the returns generated by the individual indexes around this fixed point in time. In this way we can gauge whether a typical pattern around major sporting events actually exists.  The average is depicted in the form of a special event chart, which permits us to discern the typical pattern of stock prices around major sporting events at a glance.


Stock Prices Tend to Rise for Many Months Before the Games Begin

The next chart is not a standard stock index price chart. Rather, it shows the average performance of the stock market indexes of all host countries in the time period under review. The vertical axis depicts the percentage by which the indexes rallied or declined on average. Time information is plotted on the horizontal axis.

The beginning of the sporting event is highlighted by a vertical line in the middle of the chart. A total time period of two years is shown, i.e., the year before and the year after the beginning of the event.

In other words, the chart illustrates the average performance of the stock markets of all host countries around a major sporting event over a time period of two years.


Average performance of the stock markets of countries hosting major sporting events, one year before and one year after the event, 1960 – 2018


Major sporting events tend to drive stock prices!

Source: Seasonax

As the chart indicates, the stock markets of host countries typically started to rally approximately 11 months before the beginning of Olympic Games and/or Soccer World Cups. Reasonably good entry points also presented themselves 10 months and 6 months before the beginning of the event.

However, roughly one month before the beginning of the major sporting event stocks tended to enter a strong downtrend that lasted almost six months. Even during the competitions stock prices tended to decline, if only moderately. Prices only began to recover again several months later.


Stock Prices Driven by Media Coverage and Investment

The extent of the average gain from the market low 11 months before the beginning of the sporting event to the initial peak 10 months later amounted to 13.39 percent or 15.78% annualized.

By comparison, the annualized gain of the MSCI World Index between 1970 and 2018 was just 6.35%. Thus the “pre-Olympics phase” generated roughly double the MSCI’s return in the local stock markets of the countries hosting the sporting event.

A number of reasons suggest themselves for the strong rallies ahead of such events: for one thing, major sporting events spur a flurry of public spending. Moreover, they attract a great deal of media coverage. This in turn attracts investors.

However, by the time sports coverage dominates the media close to the beginning of these events, it is already too late to invest. This demonstrates how important it is to be well-informed – which you will be with the help of our tools at or at Bloomberg and Thomson-Reuters.

PS: stay a step ahead of other investors!


Dimitri Speck specializes in pattern recognition and trading systems development. He is the founder of Seasonax, the company which created the Seasonax app for the Bloomberg and Thomson-Reuters systems. He also publishes the website , which features selected seasonal charts for interested investors free of charge. In his book The Gold Cartel (published by Palgrave Macmillan), Dimitri provides a unique perspective on the history of gold price manipulation, government intervention in markets and the vast credit excesses of recent decades. His ground-breaking work on intraday patterns in gold prices was inter alia used by financial supervisors to gather evidence on the manipulation of the now defunct gold and silver fix in London. His Stay-C commodities trading strategy won several awards in Europe; it was the best-performing quantitative commodities fund ever listed on a German exchange. You can find an introduction to the Seasonax app and in-depth information on what it can do here. Furthermore, here is a complementary page on the web-based Seasonax app, which costs less and offers slightly different functionality (note: subscriptions through Acting Man qualify for special discounts – for both the Bloomberg/Reuters and the web-based versions of the app. Details are available on request – simply send a note to with the header Seasonax!).


Charts & tables by Comdirect, D. Speck, Seasonax


Edited by PT




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