Paris Olympics 2024: How it could move the markets

Every four years, a Summer Olympics competition takes place, with viewers from all over the world tuning in to cheer on their country’s athletes in the hopes of winning the most medals and celebrating their country’s pride.

Olympic stocks are shares of companies associated with the Olympic Games through advertisements, partnerships, or sponsorships of any kind. These companies benefit from the Olympic Games because they increase their visibility and sales. As a result, these companies’ stock prices may rise during these periods. The 2024 Summer Olympic Games in Paris have already begun, and it may still be feasible to consider Olympic stocks.

The stock market does not close for the Summer Olympics, but it may experience volatility for several companies that are affected by the games.

Aside from stocks with direct ties to the Olympics, the stock market sees little correlation between the games and price movement. The country that wins the most often does not see any apparent impact from receiving the top honours.

One market that is more heavily impacted is the host country’s stock market, which frequently increases when the country is chosen as the host and shortly before the games, before calming down during and immediately after the games.

While the Olympics are important for media companies, sports fans, and others, let’s take a look at how they affect the stock market.

How major sporting events shape economic trends: The Paris Olympics case

Major sporting events, such as the Olympics, encompass far more than just medals and records. They serve as powerful economic engines for global corporations. These events can generate significant revenue through tourism, sponsorships, and broadcasting rights, accelerating economic growth on both a local and international scale.

For example, the 2020 Tokyo Olympics produced approximately $15.4 billion in revenue for Japan. The resulting effects include increased employment, enhanced facilities, and increased visibility worldwide for host cities. This significant economic impact creates a unique opportunity for investors looking to diversify their portfolios.

As the excitement surrounding the Olympics grows, now is the time to investigate how major sporting events, such as the Olympics, may affect stock markets.

The financial upside of investing in sports teams

Investing in sports teams has evolved from a luxury for the super-rich to a potentially strategic financial move. Sports franchises have demonstrated remarkable resilience, often outperforming traditional investment avenues in terms of ROI. For example, since 2009, the Dallas Cowboys’ value has increased by more than 400%, making it one of the world’s most valuable sports franchises.

Owning a football or basketball franchise provides investors with not only game-day excitement, but also significant revenue from ticket sales, merchandising, and sponsorship agreements.

Unlocking investment potential in sports & travel

Beyond direct investment in teams, the sports sector includes a wide range of businesses, including athletic clothing brands, equipment manufacturers, and media networks. Investing in these allows people to participate in the sports industry’s growth without having to buy a team.

Companies such as Nike and tech firms that improve sports experiences through VR and AI are all attractive investment opportunities. Nike, for example, has seen a 200% increase in stock value over the last decade, thanks to powerful loyalty to the company and creative product lines.

Additionally, the travel industry is one of the largest and most significant company sectors in today’s economy, making up more than 10% of global GDP. It frequently experiences a boost during major sporting events, particularly those of international interest. It is worth mentioning that analysts have upgraded the online accommodation marketplace Airbnb ahead of this year’s Olympics.

Why sports sponsorships & technology are great for investors

Sports rely heavily on sponsorships and advertising for financial support. Brands pay millions to have their logos displayed on uniforms, stadiums, and even event names. Coca-Cola and Visa, for example, have increased their global brand visibility significantly through long-term FIFA World Cup sponsorships.

These partnerships are not only profitable, but also strategic, as they align brands with the values and visibility that sports provide. Investing in companies that secure large sponsorship deals, or the agencies that facilitate them, can be extremely profitable.

The incorporation of technology into sports, which ranges from data analytics and wearable technology to e-sports platforms, is also creating new investment opportunities. This segment is rapidly expanding, driven by a greater emphasis on performance metrics and fan engagement via digital platforms. The rise of e-sports, a multibillion-dollar industry, demonstrates how digital transformation is expanding the traditional boundaries of sports.

Olympics, gold & stock trends

During the French Olympics, President Emmanuel Macron called for a political ceasefire. He stated that the time should be used for sports activities. This could postpone the appointment of a new Prime Minister and the formation of a new government. Speaking to the media at the Elysee, he stated that the French people would require some rest. Meanwhile, the EUR has weakened slightly as the common currency has lost  a bit of momentum in general.

In the meantime, markets remain in a rather downward pattern. The dollar is gaining momentum against the majority of other currencies. So far towards the end of July, the stock markets have advanced. However, the Dow Jones index is indicating a potential correction based on a pin bar candlestick pattern on the weekly chart. Gold and silver are showing signs of weakness as the Greenback strengthens.

Investing in sports with IronFX

The sports industry is thriving thanks to global enthusiasm and technological advancements. The merging of sports and finance provides numerous opportunities for expanding your investment portfolio. Whether you are a sports fan interested in finance or an investor looking for new opportunities, IronFX is a great place to start.

Explore IronFX’s trading services, which offer fast order execution and spreads as low as 0 pips. With IronFX’s simple MetaTrader 4 trading platform, you can easily invest in well-known companies, diversify your trading portfolio, and maximise your potential profits.

Disclaimer: This information is not considered as investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced, or hyperlinked, in this communication.