Winter Olympics and Fueled Up Markets
ROBARE & JONES ON THE MARKETS
The markets rose about 1.5% this week, marking its largest weekly percentage gain of 2022 so far, led by the energy, consumer discretionary, and financial sectors amid better-than-expected January nonfarm payrolls.
Markets are still in the red for 2022 after posting declines in the first three weeks of the year and the S&P 500 is now down 5.6% year to date.
Still, the S&P 500 had a strong daily gain on Monday as well as Tuesday and Wednesday, driven by better-than-expected quarterly results from industry heavyweights including Google parent Alphabet (GOOGL), chip-maker Advanced Micro Devices (AMD), and package shipping company United Parcel Service (UPS), but also had record losses from Facebook parent Meta Platforms (FB) with weaker-than-expected earnings and the stock tumbling 26%, wiping out about $232 billion in market value.
The Labor Department reported nonfarm payrolls rose by 467,000 in January, well above the increase of 125,000 jobs expected while December payrolls had a large upward revision to a 510,000 increase. Other significant news came as West Texas Intermediate crude oil hit $92 per barrel for the first time since October 2014 after OPEC+ agreed to stick to its schedule of monthly production increases, while tensions over Russian threats to Ukraine continue.
On the economic front, investors will be focusing next week on updated inflation readings, with the January consumer price index expected Thursday. The University of Michigan will also be releasing February five-year inflation expectations on Friday in addition to its February consumer sentiment index.
Let's take a look at the markets from this past week!
The Dollars and Cents of the Olympics!
Last week, China won the first gold medal of the Beijing Games with a victory in the mixed short track speedskating relay, beating the Italian team by half a skate blade. The U.S. women’s hockey team outscored Finland, Russia and Switzerland, and a 21-year-old Swede took home gold in men’s moguls.
In many countries, athletes who take home a medal in the winter Olympics receive financial bonuses and other rewards, reported The Economist and Brett Knight of Forbes. For example,
- Hong Kong promises a $642,000 bonus for a gold medal. (It hasn’t won one yet.)
- Turkey will reward a gold medalist with $380,000. (It also has yet to win gold.)
- In Italy, a gold medal is worth a bonus of $214,000.
- Spaniards who take home the gold receive $112,000.
- German Olympic medalists were rewarded with a lifetime supply of free beer in the 2016 games.
- South Korean medalists are rewarded with an exemption from national military service.
- Slovakians who win individual gold medals receive $56,000, while those who compete on teams receive $17,000 each.
- U.S. athletes receive $37,500 for a gold medal, $22,500 for silver, and $15,000 for bronze. (U.S. athletes also receive financial support through training grants, healthcare benefits and endorsements.)
The rewards for Olympic medal winners are reasonably clear. However, the rewards for cities that host Olympic games are less so. Before the Tokyo Olympics, the event cost was estimated at $7 billion. Recent estimates of the actual cost are around $28 billion.
What's your favorite winter Olympic sport? Let us know!