What "harsh weather", aka completely unpredictable cold snaps and snow during the winter were to Q1 US GDP, which somehow cratered from an expected 2.5% increase to a -2.9% collapse (a $200 billion negative swing in the US economy due to weather, let that sink in for a second), the Brazil world cup may be to the stock market. At least that is the following chart from Bloomberg [7], highlighting the "World Cup Syndrome" shows.
According to ECB data, workers everywhere—even financial types—are paying more attention to the games than to their jobs. One way of measuring the global epidemic of distraction is to look at plunges in stock market trading volumes. The European Central Bank analyzed data from the 2010 World Cup showing significant drops in trading during all games. The effect was especially pronounced when the traders’ own country was on the field.
[8]
And consider this: this analysis was done in 2010 when people actually still traded, as opposed to merely central banks transacting with vacuum tubes. One can only imagine the absolutely cratering in trading volumes in late June and early July, not only thanks to a record low VIX but also as nobody really pays attention to rigged stocks any more when at least football provides a somewhat less rigged diversion.
We can't wait to find out how big is the cliff that bank revenues fell off in Q2 (and Q3) as their employees - largely oblivious to what happens to a "market" that is now purely on "up and to the right" autopilot - were much more focused on the action in the football stadium, where for now at least, there are no dark pools to ruin the fun.
