As the streets of Vancouver fill with revelers, everyone seems to have a take on how the Olympics may play in markets.
For example, BMO Nesbitt Burns economist Robert Kavcic reached for a games-related metaphor on Friday to explain that Canadian equities have "owned the podium" so far in 2010, with a modest 2.4 per cent decline ranking as the best performance among all major stock markets. The S&P 500 benchmark for U.S. equities is down 3.6 per cent.
Then Mr. Kavcic looked back at how Canada fared against other markets during the last winter games on home soil, Calgary, in 1988.
Canadian markets badly lagged U.S. stocks in 1988, but Mr. Kavcic said in a report: "If you believe that was directly related to Canada's lack of gold medals, have no fear."
He observed that "various sophisticated econometric models (based on things like per-capita GDP, population, climate, etc.) predict that Canada will indeed own the podium in 2010."
"In reality, of course, medal counts have no bearing on equity returns," concluded the BMO Nesbitt Burns economist. "But fundamentals do, and Canada's continue to look good, especially at a time of increasing sovereign risks."