US Stocks to Fall 36%, China Stocks to Fall 66%!

Over the last 12 months, Chinese listed stocks have experienced an increase in market cap of $6.435 trillion – the largest twelve month increase for any country’s market cap in history. The previous record twelve month market cap increase of $5.811 trillion was set by US stocks during the twelve months ending March 2010, after US stocks bottomed in March 2009 during the global financial crisis.

uschinamarketcapchangettmLast month, China’s two stock exchanges the Shanghai and Shenzhen together accounted for a record 56.07% of the world’s total stock market dollar volume. America’s two stock exchanges the NASDAQ and NYSE together accounted for only 24.03% of the world’s total stock market dollar volume – a new low for the past decade.

uschinadollarvolumepercentofglobalChina listed stocks currently have a total market cap of $10.272 trillion vs. their 10 1/2 year volume weighted average market cap of $3.536 trillion. Eventually, China’s total market cap will return to its volume weighted average market cap – and this would currently require China stocks to decline in value by 65.57%.

In December 2007, China listed stocks topped out with a total market cap of $4.479 trillion. At the time, China’s volume weighted average market cap was $1.451 trillion and Chinese stocks needed to decline by 67.6% to match it. Over the following 10 months, China stocks declined in market cap by 62.4% to an October 2008 bottom of $1.684 trillion – dipping below their then volume weighted average market cap of $1.716 trillion.


US listed stocks currently have a total market cap of $27.066 trillion vs. their 10 1/2 year volume weighted average market cap of $17.437 trillion. Eventually, America’s total market cap will return to its volume weighted average market cap – and this would currently require US stocks to decline in value by 35.58%.

In March 2009, US  listed stocks bottomed during the global financial crisis with a total market cap of $10.114 trillion. At the time, America’s volume weighted average market cap was $16.774 trillion and US stocks needed to rise by 65.85% to match it. Over the following 13 months, US stocks increased in market cap by 63.6% to an April 2010 short-term peak of $16.548 trillion – rising above their then volume weighted average market cap of $16.216 trillion.

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