Academic paper shows that the US market tends several percentage points lower during the football tournament
You may have noticed I’ve mentioned the World Cup – currently taking place in the US, Canada and Mexico – a few times in recent weeks. But it’s not my fault: academic research has shown that it’s not just me distracted by the football tournament, as the market has become demonstrably less attentive while games are on.
According to research by the wonderfully-named Yosef Bonaparte, professor of finance at the University of Colorado Denver Business School, the feast of football functions as a widespread ‘attention shock’ that makes its billions of viewers unable to focus on anything else – even the stock market.
As a result, there’s reduced trading intensity, slower incorporation of new information into prices and weaker-than-usual responsiveness of markets to news flow during the tournament.
The foundational study here is Kaplanski and Levy (2010, published in The Journal of Financial and Quantitative Analysis), which found that the US market averages -2.58 percent during World Cup periods versus +1.21 percent in equivalent non-World Cup stretches. Another publication cited by Bonaparte – Ehrmann and Jansen (2017, Journal of International Money and Finance), which examined trading across 24 countries – documented large contemporaneous declines in trading volume during actual match windows.
Of course, the global attention-sucking nature of the World Cup is not news to most of the planet who tune in every four years. However, one new wrinkle in the 2026 edition – which is expected to generate some $80 bn in global economic activity – is its North American (and Mexican) setting.
Bonaparte writes: ‘As the primary host nation, the US faces an unprecedented domestic distraction effect, one amplified by the massive local economic activity the tournament generates, creating a paradox in which commercial vitality and market inattention coexist within the same national economy.’
For the many IROs embarking on earnings season, it might make for worrying reading. Those numbers may not get the comprehension they deserve. Over the next four years, it might be worth tweaking the timing so that it doesn’t fall in the June-July football frenzy.
But the converse may also hold true: if there’s a great announcement that’s likely to send your share price soaring, perhaps sit on it until after the World Cup final has been held. Launching something great now will be a bit like trying to fight for social media attention during the Super Bowl halftime show.
However, for anyone planning their IPO during a World Cup, it really might be best to consider another time: Cai, Fan and Ko (2023, The Journal of Corporate Finance), studying 7,313 US IPOs from 1985 to 2020, found market debuts pricing during a World Cup get 3.69 percent lower first-day returns and 9 percent lower underpricing than non-World Cup IPOs. However, they did also achieve higher long-run returns as the attention deficit corrects.
There’s one small caveat to be made: Bonaparte’s thesis is a working paper which is not yet peer-reviewed, so treat its findings with a pinch of salt. That’s not to undermine it, however: the studies he’s drawing on are all published and peer-reviewed.
Given how many market factors are firmly outside of an IR team’s control, perhaps there’s something heartening about knowing that one market-moving event will return every four years. But what to do about it is not immediately clear… other than to keep supporting England, of course.
