For 9 out of 10 of the past Olympic sessions, there has been the infamous “Nike trade.” Essentially, this involved NKE stock outperforming the S&P 500 by several percentage points in the run up to and during the Olympics. The streak continues into a six month span after the end of the Olympics as well.
But now, it appears that the trade has been discovered by the masses and the spread has eroded completely. NKE now UNDERPERFORMS the S&P 500 by 200 basis points (+3% versus +5%). Throughout history, NKE outperformed the S&P 500 by an average of about 18% in 9 out of the 10 recent Olympic event years we mentioned. This is now a thing of a past.