The United States dominates the rest of the world in terms of its share of total equity market capitalization. Currently, US stocks make up over 40% of global equities’ total market cap. No other country comes even close to this size with the next largest country being China with just 8.47% and then Japan with 7.09%. Hong Kong is the only other individual county with a share larger than 5%. While France is the largest European Union country stock market in terms of the percentage of world market cap at only 3%, the total share of all EU countries shown sits at over 10%. Former EU member, the United Kingdon, is also one of the larger countries but has consistently lost share over the past decade. So far this year it has lost another 0.2%.
One interesting change that we noted at the end of last year has been the massive increase in Saudi Arabia’s share thanks to one of the world’s largest companies, Saudi Aramco, hitting public markets. Although it has led to a massive jump over the long run, since the start of the year Saudi Arabia’s share of market cap has fallen 14 bps likely due to Saudi Aramco being a one-way trade lower off of its highs that were put in place only a few days after its IPO. Meanwhile, the US has taken another 1.17% of the world’s market cap in 2020 alone.
While there are several individual countries that are actually outperforming the US so far in 2020, generally speaking, the US has outperformed the rest of the world which is why the US has taken more market cap this year. Whereas the S&P 500 was up 3.93% YTD as of yesterday’s close, MSCI’s World Index excluding the US is just about flat. That trend of US outperformance has been in place for much of the past year well before the coronavirus hit Asia in December.
Another interesting country to note is China. 2020 has been off to a rocky start thanks to the coronavirus. This had sent the country’s share of global market cap plummeting down to ~8% on February 3rd. That was its lowest level since February of last year. But as this month has progressed and the situation surrounding the virus has improved, China has regained some of those losses and is now sitting with a larger share of world market cap than it ended 2019 with. Start a two-week free trial to Bespoke Institutional to access our full range of reports and interactive tools.