Neymar Stands in the Way of Messi’s World Cup Dream

(Bloomberg) -- Lionel Messi and Neymar are two of the greatest football players of their generation, yet neither has ever lifted the sport’s most sought-after trophy. That’s about to change -- for one of them -- according to Bloomberg’s MLIV Pulse survey. 

Messi’s Argentina and Neymar’s Brazil head into the World Cup, which just got underway in Qatar, as favorites, with more than half of respondents naming one of them as the likely winner. It would be the first time the tournament has been won by a South American side since 2002.

Brazil’s national team seeks redemption after a humiliating 7-1 drubbing at home to Germany in the semi-finals of the 2014 tournament. That looks like a distinct possibility after the team dominated its region during qualifying games -- winning 14 of 17 matches and conceding just five goals. 

“Brazil is the best team on the field,” according to economists at Wells Fargo, who constructed a framework built on 23 different variables including ranking, record and momentum, the value of each team’s players, and the number of times they’ve played together for the national side. “Our analysis suggests Brazil is better than Argentina by the smallest possible margin.”

Argentina’s squad is dominated by Messi, Neymar’s teammate at Paris Saint-Germain and seven-time winner of the Ballon d’Or award for the year’s best player. Messi said this upcoming World Cup, his fifth, will be his last.

Messi has suffered frustration at international level -- in 2016 he even announced his retirement after losing in the final of a major tournament for a fourth time. But he broke the bad run when Argentina won the continental Copa America title last year, fueling hopes he can conquer on the biggest stage of all in Qatar.

While Brazil is favorite to win the title, 33% of 720 survey respondents still expect Messi to pick up the Golden Ball award for the best player of the tournament. If he does, he will become the first player to have done so twice. Only 19% expect Neymar to win it, while 32% are backing France’s Kylian Mbappe -- a third player in Paris Saint-Germain’s superstar line-up. Only 7% of respondents expect Cristiano Ronaldo, Messi’s long-time rival for the Ballon d’Or, to walk away with the award.

Meanwhile, some survey respondents predict that the recent economic and political gloom in Britain will envelop the England squad as well. The UK is on its third prime minister this year after Boris Johnson lost the backing of his party, and then his successor Liz Truss was forced out too after torpedoing bond markets with her first major policy announcement. Inflation is the highest in 41 years and the country is heading into recession, if it isn’t already there. 

About 32% of MLIV Pulse survey respondents forecast that England will be the first among the half-dozen top contenders to be booted out of the competition. That would be a sharp reversal from four years ago, when England posted its best result since 1990 by reaching the World Cup semifinals. But it might not surprise England fans whose memory stretches back a bit further -- to 2014, when England got knocked out after just two matches. England faces Iran today.

Held every four years, the World Cup is the planet’s most important sporting event, attracting a total television audience of 3.6 billion in 2018. FIFA, global soccer’s governing body, projects 5 billion people will watch the competition this year. 

The Qatar tournament isn’t without controversy off the pitch. Ex-FIFA president Sepp Blatter recently stated that picking the Gulf nation to host the 2022 World Cup “was a bad choice, and I was responsible for that as president at the time.” 

Amnesty International accused Qatar of failing to properly investigate the deaths of thousands of migrant workers, while the country denied that laborers are ill-treated.

Moreover, Qatari law outlaws LGBTQ+ rights.

As far as markets go, the World Cup traditionally has an impact. Liquidity drops as traders get distracted. Borrowers sometimes choose to bring forward or delay bond issuance because of the difficulty of getting investors to focus while the tournament is on. According to a 2012 working paper published by the European Central Bank, the number of trades fell 45% when a national team was playing and volumes were 55% lower. 

While that’s similar to what happens at lunchtime on a normal day, local stocks also tend to decouple from global markets during World Cup matches -- suggesting traders just aren’t paying attention. 

Match results can move stocks too. Equity indexes in countries that lose World Cup matches historically underperform. Sadly, there’s no corresponding pick-up in the event of victory. Because the effect is asymmetrical, traders don’t even need to correctly call the result. They can short stocks from both countries going into a game and still profit, according to an article in the Journal of Finance, although the biggest impact is in smaller names which are harder to short.

There are limits to the World Cup effect, though. Judging by the MLIV survey, not to mention soccer history, current form and pretty much any other metric, the US is more likely to lose matches in Qatar than Brazil. Even so, more than half the poll respondents expect US stocks to outperform their Brazilian counterparts during the tournament.

For more markets analysis, see the MLIV Blog. To subscribe and see previous MLIV Pulse stories, click here. For full survey results, click here.

--With assistance from .

(Updates with Golden Ball chart and England’s game today.)

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