Stability has returned to Wall Street after Friday’s 300 point drop. Many industry experts credited unrest in Northern Iraq, surging Oil prices and uncertainty surrounding the 20th anniversary of the Black Monday October 1987 crash where the market lost over 22% of its value in a single day. Others, however speculated that the sudden downturn was the result of uncertainty surrounding the Red Sox ability to turn the ALCS around. Down 3-2 in Game 5, the series returned to Boston. However, the damage was done on Friday causing many to question the stability of the market and the Boston Red Sox.
Weekend trading showed an upsurge in the market however as Curt Schilling and Japanese pitching sensation Daisuke Matsuzaka, also referred to by Red Sox faithful as Dice-K, put the clampdown on the Cleveland Indians to win the American League Championship Series in dramatic fashion Sunday night. Shortly after the game was won at around midnight Boston time, the Tokyo stock exchange surged ahead on the back of their native son. American markets would soon follow.
Many people question the connection between professional sports and finances. Some would call it “irrational exuberance“. However, there is no doubt that with the World Series now a certainty for the Red Sox, markets have responded favorably. In 1987, the market responded negatively to the St. Louis Cardinals ending up 2 games down in the World Series to the Twins. The Market doesn’t like the Twins because it’s hard to tell what is a sell and what is a buy – they look too similar!
The World Series was won by the Philadelphia Athletics in 1929 but it took 10 days before the Great Depression would begin. This has been attributed to the fact that the market didn’t comprehend that Philadelphia would lose their team to Oakland eventually in advance of the “Summer of Love” when everyone moved to California.
All in all, the market has responded admirably to the win today with Tech sector stocks leading the way. An investor was overheard saying, “We gotta love these tech stocks! All the webheads were on Twitter last night talking about the Sox! Gotta go with the winner here!”
We’ll keep following this story and let you know any further developments.