As if Canada's Olympic athletes don't already have enough pressure on them to bring home the gold in Vancouver next week, it turns out the fate of our country's very economy is in the balance.
Alright, that's a bit of a stretch, but HSBC equity analyst Douglas Rowat took a look at home market performance over the past 12 Olympic Games and found that markets traded higher 58% of the time with an average return of 0.9%.
"If you believe in spurious correlations, pay attention to what the Canadian market does during the Vancouver games, it could have bearing on how we do for the rest of the year," Mr. Rowat said in a recent note to clients, with tongue planted firmly in cheek.
Mr. Rowat's analysis does not factor in Olympic success — we've never won a gold medal on home soil — but it is not much of a stretch to suggest Canadians will feel better about themselves if we win at least one gold medal, especially in that team game we play on ice. You know, the one with sticks (no, not curling).
Now, the last time we hosted the Olympics (Calgary, back in 1988) the market rose 3.2% and outperformed the S&P 500 (+2%) so imagine what would happen if we actually won anything.
"It could also be that the good Olympic feeling keeps the market momentum going for months afterwards," he said.
Mr. Rowat found that host countries gained 14.8% on the market in the year after an Olympics. The Canadian market rallied 12.7% after Calgary as well.
Oh, and in case you needed any other evidence that we Canucks take our hockey personally, the S&P/TSX Composite traded down the day after the men's hockey team got bounced out of Turin by Russia in the quarters, but traded up for three days in a row after the men's and women's teams triumphed in Salt Lake City in 2002. No pressure eh?
Now imagine what a Stanley Cup win for the Maple Leafs would do for Canada.