Can Team USA lift market sentiment?


Sentiment in U.S. stock markets may get a boost from a very unlikely source on Monday: soccer.

In Sunday's nail-biting game, the U.S. tied against Portugal with a score of 2-2. The American team was seconds away from winning, but Portugal's Silvestre Varela evened the score with a last-minute headed goal.

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US forward Clint Dempsey celebrates after scoring during a football match between USA and Portugal during the 2014 FIFA World Cup on June 22, 2014.

Still, soccer fans say a tie with heavyweight Portugal is evidence of a revitalized U.S. team thanks to coach Jurgen Kinsmann. The former German player was hired three years ago to revive the U.S. team after it failed to advance past the second round of the 2010 World Cup.

Sunday's match followed last week's 2-0 victory over Ghana. The team is currently ranked 13th out of 30 on FIFA's system.

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"This [Sunday's draw with Portugal] could go very much in favor for U.S. equity markets and lift the mood, especially since stocks have performed well so far. If the team can keep up its performance, the U.S. will have goals on both the pitch and the markets," Vishnu Varathan, senior economist at Mizuho Bank, told CNBC.

Friday's session on Wall Street saw stocks rise for the sixth straight day, with the Dow Jones Industrial Average and the hitting record highs following dovish comments from Federal Reserve Chair Janet Yellen on Wednesday.

"If U.S. markets can show low volatility and consistent goal scoring, it can lift the mood as long as one doesn't long involve the Middle East. They need to continue striking on the field and not in Iraq," Varathan added.

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FiveThirtyEight, the website founded by American statistician Nate Silver, gives the U.S. team a 76 percent chance of reaching the round of 16, commonly referred to as the knockout round.

The New York Times was more optimistic, placing those odds at 78 percent in its "The Upshot" blog, well above European favorites like Italy and Portugal, which have 65 percent and 10 percent chances of making it to the next round, respectively, according to the newspaper.

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Not all market players are optimistic however. "Psychology does play a big role in trading but if you're a professional investor, you should have discipline and not let [sports] euphoria cloud your judgment," said Chris Weston, chief market strategist at IG.

"Markets are in a good spot without the World Cup given the combination of what we're seeing in the corporate sector, record level of buyouts and the fact that the Fed is not looking to tighten anytime soon," he continued.

So, what are the odds for a U.S. World Cup victory?

"Well, even though Bund yields are lower than U.S. yields, I still think the odds of Germany winning are higher," said Mizuho's Varathan.