"America the Overvalued"

A recent edition of Grant’s Interest Rate Observer compares the market value of US based companies against US GDP and the market value of the developed world excluding the US. While America generates 44% of the developed world’s GDP it now accounts for 64% of the developed world’s market capitalization. The relationship between stock market prices and GDP appears to be lost.

“…the market value of the Wilshire 5000 represents 178% of GDP, a level second only to the 183% mark set in 2000-01; 60% is the average of the past century (in 1929, the peak was 81%).”

(Note: The Wilshire 5000 is the broadest market cap weighted stock market index of publicly traded companies in the US.)

stock market stock market performance
Source: Evan Lorenz | "America the Overvalued" | Grant's Interest Rate Observer | 02/07/2020 | Visit