Corporate Governance

These two charts show U.S. dominance of global markets 

A trader works on the floor of the New York Stock Exchange shortly before the end of the day's trading in New York July  america usa us united states women business businesswoman businessman corporation corporate finance wall street stock exchange capitalism private ownership board c-suite CEOs CFOs corporation united states us america wall street change gender parity equality goldman sachs davos industry representation fair finance fiscal financial economics economies trading trade price money profit value men male female change changing 2020 future taxation tax wealth gross domestic product gdp

Dollar dominance. Image: REUTERS/Lucas Jackson

Jenna Ross
Author, Visual Capitalist
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Corporate Governance

  • U.S. companies are a major component of many global sectors and industries.
  • As a result, they dominate global markets.
  • Healthcare and IT are two particular areas of dominance.

U.S. companies dominate global markets

Are global indexes as “global” as you think they are?

With the aim of tracking market performance around the world, these indexes incorporate securities from various regions. However, while the number of securities may be relatively well diversified across countries, a dollar perspective tells a different story. When market capitalization is taken into account, country weightings may become much more unbalanced.

Have you read?

Today’s visualization is based on a concept by S&P Dow Jones Indices that shows the percentage of U.S.-based companies in global sectors and industries as of December 31, 2019. The calculations reflect the market capitalization of companies in the S&P Global Broad Market Index (BMI), an index that tracks over 11,000 stocks across 50 developed and emerging economies.

america usa us united states women business businesswoman businessman corporation corporate finance wall street stock exchange capitalism private ownership board c-suite CEOs CFOs corporation united states us america wall street change gender parity equality goldman sachs davos industry representation fair finance fiscal financial economics economies trading trade price money profit value men male female change changing 2020 future taxation tax wealth gross domestic product gdp
The dominance of U.S companies in markets and industries visualized. Image: Visual Capitalist

Percentage of U.S. companies by sector

U.S-based companies—those that maintain their primary business affairs in the U.S.—are a major component of many global sectors and industries.

Here’s how it breaks down:

america usa us united states women business businesswoman businessman corporation corporate finance wall street stock exchange capitalism private ownership board c-suite CEOs CFOs corporation united states us america wall street change gender parity equality goldman sachs davos industry representation fair finance fiscal financial economics economies trading trade price money profit value men male female change changing 2020 future taxation tax wealth gross domestic product gdp
The breakdown by industry.

U.S.-based companies make up a staggering 73% of the information technology (IT) sector. However, China may soon threaten this dominance. The Made in China 2025 plan highlights new-generation IT as a priority sector for the country.

The U.S. is still the world’s leader, but China is coming up very fast.

Rebecca Fannin, Journalist & Author of Tech Titans of China

Healthcare is also heavily skewed towards U.S-based stocks, which make up 65% of the sector’s market capitalization. This weighting is perhaps not surprising given the success of many U.S. healthcare companies. In Fortune’s list of the 500 most profitable U.S. companies, 41 healthcare organizations made the cut.

The materials sector has the smallest weighting of U.S.-based stocks, but they still account for almost one-third of the overall market capitalization. Three American companies are in the sector’s top 10 holdings: Air Products & Chemicals, Ecolab, and Sherwin-Williams.

U.S. equity views in a global context

Given the high weighting of U.S. stocks in global sectors and industries, having a U.S. view is important. This refers to investors gaining a clear perspective on the risks and opportunities that exist in the country. Investors can consider the trends influencing American companies in order to help explain stock performance.

U.S. stock dominance also impacts geographic diversification. While it helps non-U.S. investors overcome their home bias, American investors may want to consider targeting specific international markets for well-rounded exposure.

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The views expressed in this article are those of the author alone and not the World Economic Forum.

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Corporate GovernanceBanking and Capital Markets
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