Portugal star Cristiano Ronaldo pointedly removed two Coke bottles at a press conference last Tuesday, causing Coca-Cola's market value to fall by $4 billion. With the European Championships in full flow, it may not be the only time in coming weeks where football affects share prices.
Major football matches distract investors, according to a European Central Bank working paper.
Studying market returns during 59 high-profile games in the last three World Cups, it found domestic stocks decouple from global markets because global news gets priced less than usual by distracted investors.
Furthermore, there is less attention paid to company-specific news, resulting in stocks tending to move in tandem with their national stock market.
This suggests the next few weeks might be a good time for companies to quietly bury bad news. It also indicates companies should hold off on releasing better-than-expected news; investors may be too busy following the football to notice.
The paper is at https://tinyurl.com/anfr8yty.
