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World Stock Market Composition

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By Ronald Surz :

Our data on global markets starts in 2000. At that time, America was half of the $30 trillion global market, but since then it has shrunk somewhat to 43% of the current $50 trillion market. Similarly, Europe ex the UK has shrunk from being 18% of the world to 15%. Offsetting these declines, Emerging Markets and Asia ex Japan have increased their market shares. We classify China as Asia rather than Emerging Market. Asia ex Japan has grown from 5% of the world to 15%, while Emerging has grown from less than 1% to 6%.

The World is changing in both country composition and economic sectors. The following chart shows the make-up of the US stock market going back to 1998.

Note the "Tech Bubble" that inflated in the late 1990s. Also notice that America's primary sectors are finance, technology and healthcare.

America's place in the World is supplying technology and healthcare. By contrast, as shown in the next graph, non-US countries supply materials, and have a large allocation to phones and utilities, a local phenomenon.

Who Cares

It is indeed a world economy so it's helpful to know its composition. We have choices for our investments, and knowing the location of supply is important.

See also NAIRU Should Be Bashed, Smashed, And Trashed on seekingalpha.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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