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US STOCK MARKETS vs GDP comparison

  1. Grant62

    4,872 Posts.
    94
    And now, for something compeletely different, a GDP to US stock market valuation comparison (extrapolated from the UBS warburg publication - "Data Decoder - An Investor's Guide to the US Economy" (a 218 page bohemoth).

    According to the charts appearing in the data Decoder, currently, the US stock market is tracking ~115% of GDP. Compared to previous events, this is still a high value. But nowhere near as high as in recent times.

    In early 2000, the stock market peaked at ~210% of GDP and has since veered sharply down.

    In 1987, it peaked at ~75% of GDP whilst in the late 70s through early 80s (ie: 78 to 83) it averaged out at ~35% of GDP.

    Throughout the 60s, it averaged out at between 75% and 100% of GDP, dipping in late '62 to ~70% of GDP, and peaking in '68 at ~110%.

    In 1975, it dipped to a sub 40% low, but otherwise peaked in '73 at sub-90.

    From 1975 onwards for the next 10 years, the correlated performance was sub-optimal, ranging between ~35% on the low side and 55+% on the high side. The real acceleration occurred in the lead-up to the 1987 crash where the stock market averaged 75% of GDP, before dipping away to a high-60s result through to early 1991.

    From 1991 onwards, the rate of acceleration is quite evident. But with the sharp fallback in the markets' performance over recent times. we are now back to a sub 115% correlation through to GDP and thus have now returned to the levels of performance and stability experienced throughout much of the 60s.


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