Weekly Market Pulse: Peak America?

2025-04-21 09:15:00 ET

Summary

• The US economy represents roughly 25% of global GDP but our stocks make up over 50% of total global market cap and 75% of the MSCI World index.
• It seems obvious that this disparate economic performance drove capital flows to the US over the last 15 years, with the result being that US assets are overvalued relative to the rest of the world.
• The US has had a very good run economically, but the pendulum appears to be swinging back to the rest of the world.

The US economy has been the envy of the world for a long time, especially after the 2008 financial crisis and the COVID pandemic. Our economy has grown faster than just about any other in the developed world, thanks in large part to the extraordinary performance of our technology sector. Our markets for debt and equity are the largest and most liquid on the planet. The US economy represents roughly 25% of global GDP but our stocks make up over 50% of total global market cap and 75% of the MSCI World index. Microsoft ( MSFT ), with a market capitalization of $2.7 trillion, is larger than the entire German stock market at $2.4 trillion. Apple ( AAPL ) and Broadcom ( AVGO ) together are worth more than the stock market of France. US GDP, at $27.9 trillion, is larger than Europe, Japan, and the UK combined. Our stock markets have outperformed the world since 2009 by a stunning amount: 701% for the S&P 500, 1600% for the Nasdaq, and less than 300% for most of the rest of the world....

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