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Argentina and Germany are both feeling the effects of Sunday’s World Cup final game on the trading floor today.

As upbeat as Germany’s markets were Monday, Argentine stocks were as downcast as fans of the country’s football team to start the day, with the national benchmark losing as much as 1.3%. The blue feelings to match the classic jersey of the national team (known as the Albiceleste) didn’t last though, as the Merval index reversed the initial declines to gain 0.2%.

University of Pennsylvania professor Alex Edmans found the stock markets of losing countries usually see abnormal stock returns of negative 49 basis points (0.49%) the day after losses in the World Cup knockout stage. It’s not surprising that Argentina’s losses were at one point, nearly double that figure since their world cup dreams were shattered at the highest stage of competition.

Both countries can expect to see these trends pervade price movements in their national markets for the next coming weeks, according to Goldman Sachs analyst Peter Oppenheimer.

The firm analyzed data going back to 1974 and found in the absence of economic crisis – as seen after Brazils’ victory in 2002 – winners have outperformed global markets by 3.5% for an entire month following final games. However, sentiment is a fickle thing. The tides eventually change and the winning countries, on average, see their market underperform by 4% over the next year.

Runner-ups, like Argentina, typically battle bouts of depression for three months and their stock markets underperform by 5.6%. Argentina should be hoping for a repeat of their stock market’s performance following their 1990 World Cup loss after which the country enjoyed a rather unusual 33% outperformance for four weeks.

The host nation also gets a taste of celebration following their month-long parade of culture and pride. In almost every instance, the host country’s stock market outperforms by 2.7% for the month following soccer’s top competition. Brazil is no exception to that trend seeing as their national index, IBOVESPA, has surged 3.8% following their embarrassing 1-7 defeat against Germany in the semi-finals.

Netherlands has also shown that history tends to repeat itself after its national stock market fell nearly 1.7% the day after Argentina squashed their chances of World Cup championship in a penalty shoot out. Since claiming third place in a victory against host country Brazil on Saturday, their national market has recovered from its initial disappointment and rebounded 0.63%.


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