If you want to put money on the World Cup, Goldman Sachs has some advice for you.
The Wall Street bank on Wednesday released a statistical model for predicting the outcome of the 2014 World Cup, which kicks off June 12 in Brazil.
Based on a study of international soccer matches since 1960, the football/soccer fans at Goldman expect Brazil, Germany, Argentina and Spain to reach the semifinals.
Brazil is the favorite to win the Cup, thanks to its home field advantage, according to the model.
That could be good news for Brazilian stocks.
Goldman found a link between a World Cup victory and the short-term performance of the stock market in the winning team's home country. It looked at the stock performance of winners going back to 1974.
On average, the winning nation outperforms the global market by 3.5% in the first month following the World Cup. But the "trophy bounce" doesn't last.
By the end of the year, stocks in the home country of a World Cup winner have, on average, underperformed by 4%.
Brazilian stocks went into free fall during the first three months of the year. But the Bovespa index clawed back in April and May and is now up about 2% for the year.
The Brazilian government has spent some $11 billion to prepare for the month-long series of 64 matches, though economists say the economic impact from the World Cup will be fleeting.
Goldman said the pattern of stock market outperformance by World Cup winners is remarkably consistent, with one exception: Brazil won in 2002, but the nation's stock market plunged 19% as it grappled with a recession and a currency crisis.
Second place is first loser
Meanwhile, Goldman found that stocks in the home country of a World Cup runner-up tend to take defeat badly.
"The runners-up seem to experience a post-final bout of the blues," the report states.
Most of the runner-up nations saw their stock markets underperform by 1.4% in the first month following the World Cup.
There is one notable exception: Argentina was a runner up in 1990, yet the nation's stock market surged 33% in the month after its team was defeated by Germany.
The Argentinean peso has plunged in value this year as the government devalues the nation's currency in a bid to jump start growth. While the benchmark Merval index is up 40% this year, Argentine stocks have lagged after adjusting for inflation.
Goldman also found that stocks in the country that hosts the World Cup enjoy a nice bounce in the month following the event. But, as with the winners, the gains fade fast, with nearly half underperforming over three months.
"The message seems to be: enjoy the gains while they last," the report states.
A judge in New York has ordered Fabrice Tourre, a former Goldman Sachs (GS) executive, to pay $825,000 in civil penalties for his part in a mortgage deal that prosecutors say was designed to fail.
Tourre was the only person named by the Securities and Exchange Commission when it accused Goldman in 2010 of defrauding investors in the 2007 sale of securities tied to subprime mortgages.
The SEC claimed that Tourre and MOREBen Rooney - Mar 12, 2014 12:19 PM ET
The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, Abbott Laboratories and AbbVie, La Monica does not own positions in any individual stocks.
President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into law on July 21, 2010. That was supposed to help prevent big banks and financial firms from doing the things that got MOREPaul R. La Monica - Dec 12, 2013 1:58 PM ET
Goldman's profits doubled. JPMorgan (JPM) and Citigroup (C) topped expectations. Next up, Bank of America.
The big banks have reported strong earnings this week, and traders on StockTwits are betting the trend will continue with Bank of America (BAC), which releases second-quarter results Wednesday.
$GS great numbers from banks. Now all eyes will turn to $BAC
Following a blockbuster report from Goldman Sachs (GS), shares Bank of America briefly rose above MOREBen Rooney - Jul 16, 2013 2:10 PM ET
Apple sold $17 billion worth of bonds late Tuesday in the largest sale of corporate bonds ever.
The company offered both fixed and floating rate bonds, with maturities of of 3, 7, 10 and 30 years.
At $17 billion, the offering trumps Roche Holdings' $16.5 billion bond sale in 2009, according to data from Dealogic.
Apple saw strong demand for its bonds, which were rated Aa1 by Moody's and AA+ by Standard & MOREBen Rooney - Apr 30, 2013 11:24 AM ET
Wall Street has been taking a second look at J.C. Penney in the weeks since controversial CEO Ron Johnson stepped down.
J.C. Penney said Monday that it secured a $1.75 billion loan from Goldman Sachs (GS). The announcement confirms reports late last week that that the retailer was nearing a financing deal with Goldman.
Shares of J.C. Penney (JCP) rose more than 4% Monday. The stock gained 9% last week as investors welcomed MOREBen Rooney - Apr 29, 2013 12:25 PM ET
Wall Street is turning its back on gold.
Both Goldman Sachs and Deutsche Bank lowered their year-end forecast for the precious metal this week, citing an improving U.S. economy.
Goldman slashed its target to $1,545 per ounce for 2013, down from its previously estimate of $1,610. The bank also lowered its outlook for 2014 to $1,350 an ounce, down from an earlier forecast of $1,490.
Meanwhile, Deutsche Bank reduced its year-end forecast MOREHibah Yousuf - Apr 10, 2013 2:06 PM ET
It's that time of year again. Most of the nation's big banks have disclosed how much chief executives earned in 2012. While some had their compensation cut, others received hefty raises.
One caveat: Wells Fargo (WFC) CEO John Stumpf, who received $17.6 million in total compensation in 2011, is not on the list. Wells has not yet disclosed Stumpf's 2012 compensation.
Lloyd Blankfein: $21 million
The CEO of Goldman MOREBen Rooney - Feb 25, 2013 5:26 AM ET
Bank stocks have been on a tear in 2012. Monday was no different, as shares of big banks pushed the broader market higher.
Bank of America (BAC), Citigroup (C), Goldman Sachs (GS) and Morgan Stanley (MS) all climbed more than 2%, while Wells Fargo (WFC) rallied more than 3%. AIG (AIG) shares were up after the company said it plans to sell its stake in AIA Group, a Hong Kong-based life insurance MOREHibah Yousuf - Dec 17, 2012 12:59 PM ET
Goldman Sachs (GS) CEO Lloyd Blankfein thinks Washington will resolve the fiscal cliff before the end of the year, but says 2013 will still be a tough year.
"The next 12 months will be tricky," warned Blankfein, speaking at a conference Wednesday hosted by The New York Times' Dealbook. "Any compromise will involve some dose of austerity -- a deflationary policy."
That's a stark contrast to fellow Wall Street titan Jamie MOREHibah Yousuf - Dec 12, 2012 1:18 PM ET
Not a member yet?Sign up now for a free account
|Apple to FINALLY join Dow. It's about iTime!|
|6 stocks to buy and hold for the next decade|
|Abercrombie & Fitch is in serious trouble|
|Putin gets tough, slashes own salary as economy tanks|
|You'll have to wait for your giant iPad ... but it'll be worth the wait|