By Tom Burnett CFA
On October 19, 2021, SIFMA (Securities Industry and Financial Markets Association) released its third quarter report on the overall structure of the global securities industry. The report has two main sections-equities and fixed income. We summarize several highlights from the report below.
Total global equities market cap at the end of September 2021, was $122 trillion, of which the U.S. market accounted for $50.0 trillion or 41%. That figure is the largest percentage for the U.S. market in the past ten years. Over the past ten years, the U.S. market share has averaged 36.3% of global market cap with the lowest figure of 30.8% recorded in 2011. The next highest region is the EU with 11.4%, followed by China with 11.0% and Japan at 5.5%. Over the past ten years, the global market cap has risen from $51 trillion in 2011 to the latest figure of $122 trillion. The U.S. market cap has more than tripled from $16 trillion in 2011 to the most recent figure of $50.0 trillion. By comparison, the U.S. GDP is estimated at $21 trillion in 2021. The ratio of market cap to GDP of 2.49x to 1 is the highest in the past ten years.
The U.S. average daily trading volume for equities through Q3 of 2021 was 10.1 billion shares per day, down slightly from the 2020 year-to-date trading volume. Listed options trading volume of 38.6 million contracts a day, however, is a record, up some 30% from the 2020 listed options volume.
In the fixed-income markets, the global outstanding total is $123 trillion, of which the U.S. market is $48 trillion or 38% of the total. Over the past ten years, the U.S. outstanding amounts averaged 38.7% of the global totals. The EU was the second largest region with 20.1% of the total outstanding amounts. China accounts for 15.5% of the total. In terms of trading in the U.S. fixed-income market, the U.S. Treasury/Agency segment accounts for about 40% of average daily fixed income trading volume.
Tom Burnett CFA is Director of Research