While the U.S. stock market has posted small gains this year, it has lost quite a bit of share in terms of world stock market capitalization. At the start of the year, the U.S. stock market made up more than 37.5% of total world stock market capitalization. As of today, it makes up 35%. Using Bloomberg data, you can see the loss of share pretty clearly in the chart below.
So if the U.S. is losing share, which countries are gaining? The two biggest gainers have been China and Hong Kong. The first chart below shows % of world market cap for the U.S., China, Japan and Hong Kong, while the second chart shows it for just China, Japan and Hong Kong. These four countries have the four largest shares of total world market cap.
The U.S. still holds a commanding lead on the rest of the world, but both China and Hong Kong have seen huge gains recently. China has recently surpassed the 10% mark, while Hong Kong has recently overtaken Japan to move into the #3 slot. Just ten years ago, China only made up 1% of global market cap, while Hong Kong only made up 3.2%. Over the last year, China’s % of world market cap has doubled from 5% to 10%, and it has increased 3 full percentage points in 2015 alone.
Below is a chart that shows market cap share for the U.S. compared to the sum of the share made up by China, Japan and Hong Kong. While the two are really beginning to converge, the spread was even lower during periods of the financial crisis back in ’07/’08/’09.