The U.S. stock market may be down 21% this year, but it’s far better than most of the rest of the world. The U.S. stock market, which has been outperforming most other markets for a long time, is continuing to increase its market share of global equities. Bank of America chief investment strategist Michael Hartnett noted that U.S. equities are now 66% of the MSCI World Index, a market-capitalization weighted index that is a benchmark for global equity funds. That 66%, Hartnett says, is an all-time high. What’s going on? Europe is having a tough time due to the Russian invasion of Ukraine, and the Pacific region, heavy on emerging markets, is having a tough time due to the strong dollar and economic weakness in China. Global markets in 2022 South Korea (EWY) – 35% Taiwan (EWT) – 33% Vanguard Europe (VGK) – 30% China (MCHI) – 30% Japan (EWJ) – 25% It all translates into a lower global market capitalization for stocks. How much lower? Hartnett notes that Tesla’s market cap, at roughly $750 billion, is now the same as the entire European banking sector. One thing’s for sure: this year’s downturn only adds to the dominance of the United States. Whereas Hartnett says the U.S. accounts for 66% of the value of all the stocks in the world, the iShares ACWI ETF (ACWI), an index of global developed and emerging market countries, notes that the U.S. is 60.3% of its index. Regardless: the U.S. is the global colossus when it comes to stocks. Nothing else comes close. U.S. stock market: king of the hill (by market capitalization) U.S.: 60.3% Japan 5.4% China 4.1% UK 3.9% Canada 3.2% France 2.7% Switzerland 2.5% Australia 1.9% Germany 1.9% Taiwan 1.6% Other 12.2%
