Can you hear that noise? It is the sound of fans all over the world starting to cheer on their country or favorite team at the upcoming FIFA World Cup, which is being held in Brazil this year. This is a great sporting event where the world almost stands still for a month. So with all this excitement and buzz, why are the bulls of the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) so bearish on Team USA?
There is good reason for those who are long the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) to want to see Team USA exit the tournament as early as possible. Going back in history, the best placement for the U.S. was a 3rd place result in 1930 Uruguay champions). Just the shear mention of that "dirty" decade will send any bull running for the hills. In the 1920's the markets were roaring higher and seemed unstoppable (sound familiar?). Then came the crash of 1929 which sent the U.S. economy into a tailspin, and even worse, a depression.
Here is another example of how Team USA's success came at a time when the economy was reeling. In 2002, Team USA had its second best result in its history, reaching the quarterfinals (Brazil champions). Back then the market was coming off an amazing secular bull run from 1982-2000, where again, the market seemed unstoppable. Until the tech wreck plummeted equities and sent the economy into a recession and stocks into a secular bear.
Team USA's success in the World Cup has always come at a time when the US economy is in malaise and despair. This time around, however, the economy seems to be on firmer ground; bulls of the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) are quite content in keeping things that way. Even if it means being bearish on Team USA.
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