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Global Stock Market Capitalization Poised to Hit Three-Year High

30.09.2024 21:00 1 min. read Kosta Gushterov
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Global Stock Market Capitalization Poised to Hit Three-Year High

Global stock market capitalization is on track to reach its highest level in three years, driven by recent interest rate cuts from the Federal Reserve and economic stimulus measures from China.

According to Bank of America, global stock market capitalization is expected to exceed the record $123 trillion set in October 2021, based on data from GFD Finaeon.

The Vanguard Total World Stock ETF, which tracks both U.S. and international stocks, has already surpassed its previous peak, achieving a new all-time high.

Bank of America strategists, led by Michael Hartnett, noted that market anxiety tends to decrease when policymakers take decisive actions. This week, China announced monetary stimulus measures alongside the Fed’s half-percentage-point rate cut, contributing to a rebound in confidence.

The Hang Seng index experienced a remarkable 13% surge this week, marking its best performance since 1998. The strategists indicated that the Fed’s decision to cut rates without a looming recession is favorable for riskier assets. Investors believe that the recent policy shifts from the Fed and China could mitigate recession risks.

To capitalize on the situation in China, the strategists recommend focusing on industrial metals, materials, and international stocks, particularly if the stimulus efforts support a stable yield for China’s 10-year bonds, which yielded around 2.17% on Friday.

Kosta has been working in the crypto industry for over 4 years. He strives to present different perspectives on a given topic and enjoys the sector for its transparency and dynamism. In his work, he focuses on balanced coverage of events and developments in the crypto space, providing information to his readers from a neutral perspective.

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