NYSE market value surpasses the US GDP
THE New York Stock Exchange’s value increased due to the recent growth of the stock market amid the coronavirus pandemic. This growth has made the stock exchange surpass the US economy.
Financial website Finbold recently released data that indicated that the $25.62 trillion market capitalisation of the New York Stock Exchange (NYSE) is higher than the US GDP of $21.67 trillion.
The website stated that the market cap was the latest available data from February 2021 based on World Federation of Exchanges figures. The GDP data is as of April 2021, provided by the Congressional Budget Office.
According to Finbold, the pandemic’s role in the stock market cap surge is exhibited when comparing the NYSE’s value between February 2020 and February 2021. “Last year, NYSE’s market capitalisation was $15.54 trillion while the GDP was $21.84 trillion,” it said.
Finbold said Nasdaq-US, the second-largest exchange globally, has a market cap of $19.51 trillion. Cumulatively, both Nasdaq and NYSE have a market capitalisation of about $45.13 trillion, which is at least two times higher than the U.S. GDP.
“Furthermore, the value of the two equity markets highlights the strengths and growth of the US private sector compared to the economy,” said Finbold.
According to Finbold, the NYSE benefited from the recovery thanks to massive amounts of stimulus support from the Federal Reserve and Congress, limiting how far stocks fell.
“The support acted as a buffer while offering an opportunity for growth. Additionally, the NYSE hosts some of the biggest companies known for massive corporate profit margins,” it said.
Finbold said the US economy suffered its most significant losses. The pandemic shattered consumer and business spending while the economic recovery was threatened by a series of new infections that saw authorities shut down economies.
“However, the economy’s prospects might change with continued recovery due to the ongoing vaccination. Notably, the GDP has a long way to go in suppressing the entire equity market value,” said Finbold.
BUSINESS REPORT ONLINE