FIFA14 World Cup and financial markets

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Football, rugby, cricket, baseball, (*OK American football & Aussie rules football too just to be inclusive) are popular sports with most in the global financial markets. With the impending FIFA14 World Cup upon us in summer, what will happen to the traders & portfolio managers in banks, hedge funds, pension funds, mutual funds & insurance companies? Short of abandoning their posts, their attention will be on the TV in the dealing room playing that match while they root for their teams.  Only the algos running the HFTs machines will continue to do their work unfailingly!

There have been many research done in the recent past to suggest anaemic volumes in stock markets & also of declines when a country loses a game http://www.nltimes.nl/2014/01/29/world-cup-losses-trigger-stock-market-drop/.  Even the venerable ECB had done a study on it before http://espn.go.com/sports/soccer/story/_/id/7573861/stock-market-trading-slows-world-cup-study-says as reported & the actual study can be seen here http://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp1424.pdf.

However, this FIFA14 World Cup fever does increases the likelihood of the potential path of least resistance .. which is for a higher stock market & in risky assets in general as uninvolved cash on the sidelines, cautious traders & portfolio managers failed to invest & tracked the grinding higher markets. Perhaps, the silent algos in HFTs who do not watch any FIFA14 World Cup matches might get it right & actually be the culprits pushing & buying the markets even higher from here!

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