'US Election and Vaccines' Drive Money Flowing into Markets... Global Stock Market Hits Record $95 Trillion Market Cap

Impact of Liquidity Released by COVID-19 Fiscal and Monetary Policies
Experts "Stock Market Expected to Show Further Gains Due to Vaccine Optimism"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Following the virtual confirmation of the winner in the U.S. presidential election and growing expectations for the development of a COVID-19 vaccine, massive liquidity is pouring into the global stock markets. Funds released through large-scale fiscal and monetary policies are flowing into the stock market, pushing market capitalization to record highs.

According to Bloomberg and others on the 14th (local time), the total market capitalization of stock markets in 86 countries worldwide was $95.4162 trillion (approximately 10,639 trillion KRW) as of the 12th, marking a 9.2% increase compared to the end of last month. After a brief pause and decline at the end of last month, the global stock market capitalization has turned upward this month following the U.S. election results and Pfizer’s interim vaccine trial results.

On the first trading day after Joe Biden’s victory was confirmed, on the 9th, and following Pfizer’s announcement, the Dow Jones Industrial Average in New York surged more than 1,600 points intraday to reach a record high of 29,933.83. Major European stock indices rose between 4% and 7%.

Thorsten Slok, Chief Economist at Apollo Global Management, a U.S. private equity firm, recently explained in a report that the global stock market has reached an all-time high of $95 trillion and has fully recovered from the plunge experienced in March when the COVID-19 crisis began in earnest. According to his report, the global stock market capitalization, which was around $90 trillion in early March before the spread of COVID-19, sharply dropped to about $60 trillion within a month.

Slok told CNBC, "Although the short-term outlook may be negative due to the resurgence of COVID-19, the global stock market is expected to continue rising due to optimism about vaccines, accommodative monetary policies by central banks, and prospects for additional economic stimulus." CNBC explained, "The driving force behind the seven-month rebound remains the unprecedented monetary policies and stimulus measures by global central banks."

This trend is also reflected in the fund market. According to EPFR Global, a market research firm that tracks fund flows, $44.5 billion flowed into the global fund market during the week ending on the 11th. Of this, $32 billion went into U.S. equity funds, marking the largest inflow since 2000, according to foreign media reports.

Matt Gertken, a strategist at BCA Research, said, "The vaccine announcement has strengthened the movement to return to normal life following the U.S. election," adding, "Although vaccine distribution will take time, the world is already expecting economic recovery next year." Lisa Erickson, head of US Bank Wealth Management, said that while further COVID-19 spread and movement restrictions could hamper the U.S. stock market, the vaccine could provide new optimism to the market.

This content was produced with the assistance of AI translation services.