Thursday, February 17, 2011

World Stock Markets Continue to Rebound in January to Three-Year High of $57.2 Trillion

The total value of the world's stock markets increased by $2.4 trillion in January to $57.2 trillion, following a $3.1 trillion increase in December, according to data from the World Federation of Exchanges.  Over the last 12 months the world stock market capitalization has increased by 23.2%, and by almost $11 trillion, as stock markets around the world recovered as the global economic recovery took hold.  Compared to the cyclical, recession-low of $26.6 trillion in February 2009, world equities have more than doubled in value in slightly less than two years.  

The $57.2 trillion value of world stocks is less than 10% below the $63 trillion pre-recession peak in October 2007, and is at the highest monthly level since December 2007 when the U.S. recession started.  


At 2/17/2011 4:17 PM, Anonymous Anonymous said...

Hmm, this could be bad, the US stock market was getting highly overvalued at the last peak around 2007, and all indications were global markets were too. The fact that world markets are heading back to those nosebleed levels again may signal another crash, as the inevitable correction happens. On the other hand, I think there's a good chance this bulge will be bailed out by a real tech boom, but then I thought that would happen with the last boom too. ;) Frankly, these whipsaw cycles within the last couple years are a worrying sign, a good indication that real investors are not in control and that it's a herd of retail and other dumb investors driving the markets. You have to wonder if the massive govt interventions in 2008-9 haven't made these dumb investors overconfident and liable to do more damage.

At 2/17/2011 9:28 PM, Blogger VangelV said...

Either equities are overvalued or markets are recognizing the fact that fiat currencies are in big trouble. With most input costs soaring we either have a lot of inflation that is not being reflected in the official data or we have a problem passing on the costs to consumers. That means that we either have an inflation problem or a profit problem. Neither is very good for the stock markets.

At 2/18/2011 8:12 AM, Blogger niknaknoo said...

They don't include the stock markets in the inflation figures then?

At 2/18/2011 8:26 AM, Blogger geoih said...

Amazing, the magic that can be worked by printing a couple of trillion dollars.

At 2/18/2011 9:03 AM, Blogger Methinks said...

I tend to agree with the other posters, professor.

The stock market is not the economy (don't have to tell you that).

One worrying trend is that regulators all over the world have imposed an even more perverted market structure in most of the world's markets that bubbles are much more likely. Thus, it's very difficult for me to take this data seriously as an indicator that the securities markets are reflecting an economic recovery rather than the results of perverted incentives.


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