Sunday’s Wimbledon final had its share of long rallies – 32 exchanges of the ball between Andy Murray and Novak Djokovic in one particularly memorable point – but will the victory by the first male British Wimbledon champion since 1936 give UK share prices a similar bounce this year?
Pundits often look for connections between sports and financial markets, or even political elections.
It once was thought that the winner of the Super Bowl could predict the US stock market. If the American Football championship game was won by a team from had been in the old NFL before the merger of the two leagues, then the market would rise that year. If a team from the old AFL won, then the market would fall. This seemed to prove true for a while, but more recently has been no better a predictor than flipping a coin, i.e. right about half the time.
Efforts to find a correlation between UK share prices and British Wimbledon victories are hampered by two problems…er, lack of data and long time scales. Neither the FTSE-100 nor FTSE All Share indices even existed in 1936, when Fred Perry won his last Wimbledon title. However, other indications suggest it was a good year for stock investors.
According to the book, “A Study of the Capital Market in Britain from 1919-1936” by A.T.K. Grant, 1936 saw £90 million in new share issues, the highest since the crash year of 1929. The broader UK economy also was slowly healing, with unemployment down to 13%, from almost 22% four years earlier.
Yet hope springs eternal, both in sport and investment, so we would like to think that 1934 is the better comparison to 2013.
That was the year of the first of Perry’s three Wimbledon titles, and we expect nothing less of Murray. According to the statistics provided by Grant, 1934 brought a 3-point drop in unemployment to just under 17%, while new share issues more than doubled to £65 million from £31 million the year before.
Go Andy!