Optimism all around the market erased the losses of the past three months, including in sports, as the Sportico Sports Stock Index rose 9% in June, pushing the index to 1,505—its highest mark since mid-February.
Despite weakening consumer spending and consumer confidence in recent weeks as well as dour outlooks from home builders and uncertainty about inflation and the labor markets, Wall Street embraced expectations that tax incentives in the pending budget bill will offset much of the impact of the Trump tariffs that roiled markets earlier in the year. The S&P 500 Index gained almost 5% to close at an all-time high of 6,206 Monday.
“Fear and uncertainty have come down countless notches from where we were,” Alex Coffey, senior trading and derivatives strategist at Charles Schwab, said in Monday market commentary from the brokerage. “Historically, the first few weeks of July are some of the most bullish of the year.”
Indeed, many of the best performers in the sports index were companies that suffered the most at the peak of Trump’s tariff bluster. Topgolf Callaway Brands (MODG) had fallen nearly 50% this year by April, but was the best performer in the Sportico index in June, rallying 27% for the month. Investors appeared heartened by one of the few bits of company-specific news in recent weeks: the few million dollars of stock purchased by Nigerian billionaire Adebayo Ogunlesi, a director of the golf company.
Topgolf Callaway also appears increasingly likely to not see much of a net impact from tariffs. While it may cost the company millions on U.S. goods, a weaker dollar resulting from the Trump import taxes and the increase in the federal deficit should boost sales outside the country, where Topgolf Callaway generates 40% of its revenue. Preemptive cost cuts, meant to counteract potential tariff effects, also underpin investor confidence, as does anticipated benefits of splitting off the Topgolf business by the end of the year, either as a standalone company or sold to another corporation.
All told, 37 of the 40 components of the Sportico Sports Stock Index posted gains in June (17 of those rising more than 10%), an exceptional winning percentage that helped make for the index’s best month since November. The index is just 24 points away from hitting its highest mark since 2021.
In another sign that optimism is winning out, Manchester United (MANU) shares gained 25% in the month, as good financial results—revenue ticked up 17% in the first quarter of the calendar year—outshone poor on-field performance. The Red Devils completed their worst Premier League campaign ever and will miss out on European competition next season, which will hurt the company’s ticket, media and sponsorship revenue. Still, cost-cutting billionaire co-owner Jim Ratcliffe helped push the company to a rare and modest, pre-tax profit last quarter, moves that aren’t expected to hurt the club’s popularity worldwide.
“The club’s recent leadership underscores a shift toward experienced European football on and off the pitch, and a real opportunity to improve team performance and club growth,” Jefferies analyst Randal Konik said in a June 6 note. “The team is well-known and should continue to perform at a high level over the long term.”
Only three sports stocks didn’t participate in June’s bull run. The worst performer was Roger Federer-backed sneaker maker On Holding (ONON), which fell 12% to $52.04, erasing all the gains it had from a well-received earnings report in May. June didn’t bring any news that would seem to be responsible for On’s decline. Instead, analysts suggested the stock was valued too highly for the sportwear and footwear sector as it neared all-time highs around $60 a share to start the month. It’s possible the thrill of On’s remarkable run as a challenger brand is colliding with the reality that the company still just has 2% of the global athletic footwear market and a limited product selection compared to Nike (NKE, up 18%) and Under Armour (UAA, up 2%).
Broadcaster Sinclair (SBGI) slipped 2% in the month while other broadcasters including Nexstar Media (NXST, up 2%), Fox (FOX, up 3%) and Comcast (CMCSA, up 3%) were among the weakest gainers of the index. Traditional media appears to be suffering from concerns large brands may pull back on advertising the back half of the year in response to various tariff worries and consumer spending trends. Last week Sinclair extended its deal as exclusive U.S. broadcaster of the WTA through 2032. The contract covers all WTA 1000, 500 and 250 events, except tournaments. Without specifying any figures, Sinclair says its ratings for women’s tennis have grown since 2023, especially among the coveted 18-to-34-year-old demographic.
The Sportico Sports Stock Index is a basket of 40 stocks that rely on sports for a significant portion of future growth. The index includes sports teams and leagues such as the Atlanta Braves (BATRA, up 13%), recreation operators such as Vail Resorts (MTN, down slightly), sports betting companies including Super Group (SGHC, up 26%) and videogame publishers like Electronic Arts (EA, up 11%). The index is equal weighted, meaning each stock starts off as 2.5% the value of the overall benchmark. Every three months the components are reset to 2.5% weighting. Stocks are dropped and added as needed at those times, though there are no changes this period. To be included in the index, stocks must be traded in the U.S. with sufficient daily volume and a market capitalization greater than $50 million. The index was launched in August 2020 at 1,000, meaning it is up more than 50% since. The index peaked at 1,763 in October 2021.
