Stock Market Peaks of G-20 Countries Since Global Financial Crisis

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The US equity market reached a new record high since the Global Financial Crisis(GFC) in July this year. Since that peak the market has been wobbly to say the least. None of the other global markets have reached a peak this year. In fact, some markets like Russia, Brazil and Canada reached their peaks since GFC back in 2011. Decline in commodities and other factors have not helped these equity markets attain a new peak.

The following table the market peaks for G-20 countries since the GFC:

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Source: Crescat Capital LLC

U.S. vs. Emerging and Other Developed Markets

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The following is a neat chart compares the US with other markets in terms of key factors like populations, GDP, stock market capitalization and bonds outstanding.

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The US accounts for just 5% of the world population. But generates 15% of the global GDP. In terms of stock market capitalization it is even more astonishing. At 55%, the US equity markets account for over half of the global market capitalization.

For emerging markets it is exactly the opposite. While they markets are home to 84% of the world’s population, they represent just 12% of the global stock market capitalization.

Source: Bourbon Financial Management, LLC

Global GDP Share vs. Equity Opportunity Set

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The following chart shows the world GDP share between the US, other developed and emerging markets and the global equity investment opportunity set. The US accounts for just 15% of the global GDP but over 31% of firms over $5 billion in market capitalization in the world are US-based. This is because many of the world’s highly successful firms are located in the country especially in the tech sector. Even in other sectors such as basic commodities like coffee, Starbucks Coffee(SBUX) dominates the world. The other point to remember is the universe of international stocks is huge as they are home to 69% of companies with over $5 billion market caps. So for investors looking to diversify globally there are plenty of companies available to invest in foreign markets.

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Via Bourbon Financial Management

Disclosure: No Positions