Taps Coogan – October 10th, 2023
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The following article an excerpt of an article from Visual Capitalist:
Global equity markets have nearly tripled in size since 2003, climbing to $109 trillion in total market capitalization.
Over the last several decades, the growth in money supply and ultra-low interest rates have underpinned rising asset values across economies.
Given this backdrop, the above graphic shows the size of the global stock market in 2023, based on data from the World Federation of Exchanges (WFE) and the Securities Industry and Financial Markets Association (SIFMA).
The Global Stock Market, by Share
With the world’s deepest capital markets, the U.S. makes up 42.5% of global equity market capitalization, outpacing the next closest economy, the European Union by a significant margin.
Here are the world’s major equity markets based on global market cap share as of Q2 2023:
| Country / Region | Market Cap | Share (%) |
|---|---|---|
| U.S. | $46.2T | 42.5% |
| EU | $12.1T | 11.1% |
| China | $11.5T | 10.6% |
| Japan | $5.8T | 5.4% |
| Hong Kong | $4.3T | 4.0% |
| UK | $3.2T | 2.9% |
| Canada | $3.0T | 2.7% |
| Australia | $1.7T | 1.5% |
| Singapore | $0.6T | 0.6% |
| Rest of Developed Markets | $10.2T | 9.4% |
| Rest of Emerging Markets | $10.0T | 9.2% |
| Global Total | $108.6T | 100.0% |
Data as of Q2 2023. Numbers may not total 100 due to rounding.
Today, U.S. equity markets total over $46.2 trillion in market capitalization.
Compared to other rich nations, U.S. stocks have often outperformed over the last several decades. If an investor put $100 in the S&P 500 in 1990 this investment would have grown to about $2,000 in 2023, or four-fold the returns seen in other developed countries.
The second-largest equity market is the European Union at 11.1% of global share, followed by China, at 10.6%.
In the last 20 years, China’s economy has increased by roughly 12-fold, reaching $19.4 trillion this year. China’s equity markets have also grown considerably, fueled by the incorporation of Chinese domestic stocks into the MSCI Emerging Market Index in 2018, and earlier, with the internationalization of its equity markets in 2002.
Japan’s equity markets account for 5.4% of the global share, followed by Hong Kong, at 4%.
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Not to be pedantic, but the combined market cap of the Dow and Nasdaq is around $57 trillion; divide that by world market cap of $109 trillion and you get 52%, not 42.5%. Hard to believe we added $15 in market cap in just the last few months.