How Much Is The Market Value Of Global Stock Market?

The market turmoil over the past two weeks has swept global stock markets from New York to Sydney.

The total loss is hard to say for sure.

Take the figures reported by various media, they estimate the total market value loss of global stocks from 2 trillion and 500 billion dollars to more than 4 trillion dollars in the week of from August 1st to 5th.

Tracking global market capitalization

These are no doubt frightening data, reflecting the bleak prospects that many investors have been feeling.

However, efforts to capture the instantaneous market value of the global market have their limitations. Economists and investment experts say that apart from reflecting (and perhaps affecting) the daily market sentiment, it is not clear how significant the data are.

Dimitris Melas, executive director of MSCI, Morgan and Dimitris, director of European research, estimates that changes in global market value are very limited.

The Morgan Stanley Capital International MSCI All Country World Index is a major source of data for such statistics.

Morgan Stanley Capital International created this index to give investors and

He said, "at the end of every trading day, whether the market is going up or down, for long term investors, these are book gains or book losses before investment is realized."

Stocks account for about 1/4 of the world's financial assets, but they can easily become the focus of attention. Relatively easy to track, at least for some reasons.

Unlike some bonds and other assets, stocks are publicly traded, and pactions are frequent, so they can be priced in real time.

Globally, the valuation of all stocks is between 30 trillion and 55 trillion dollars, depending on whether the valuation includes private equity, all government stocks or stock that is not available to general investors.

The World Federation of Exchanges (WFE), estimated at $55 trillion and 810 billion last month, is at the top end of the valuation range, but this figure may still underestimate the real value, because it does not include non member exchanges or OTC stocks.

Peter Clifford, deputy director general of WFE, said that WFE statisticians "strongly dispute all data collected by us," and they are considering adopting a more extensive statistical approach to Peter.

Another difficulty is

The difference between valuation data reflects how complex the index business is today, says Jonathan Jonathan, chief marketing officer of FTSE Group, an index supplier. (Jonathan Horton)

FTSE estimated that the global market value of the first week of August was about $3 trillion and 785 billion, and the world index of Morgan Stanley Capital International lost 2 trillion and 794 billion dollars.

Some media reports on the loss of market value in the week of from August 1st to 5th are not comparable. For example, the the Guardian reported $2 trillion and 500 billion, while Bloomberg reported more than $4 trillion, and did not know what data they were using.

Neither spokesman of the two media provided data sources for the above data.

Professor Aytek Sen said, "3 trillion dollars is a reasonable approximate figure.

Can we get any more accurate figures?

Maybe not, and considering that the market situation is developing rapidly, it may not be necessary to make it more precise.

Some investment experts say these data do not necessarily represent the impact of the economy on the market.

Lynn Blake, chief investment officer of Global Equity Beta Solutions, State Street Global Advisors, said, "on the day of your analysis, these changes do reflect the market situation on that day."

"These are just heading data," she added.

To a certain extent, they are put there to arouse readers' interest.

The data also have a strong tendency to fluctuate. This week's paction proves this.

Susan Lund, research director of the McKinsey Global Institute Research Institute in McKinsey & Co., in Columbia, said that the same amount of stock market evaporation is not as serious as the real economy is shrinking trillions of dollars, because the market can rebound quickly.

And the change in market value always depends on the comparative base.

Compared with two weeks ago, the global stock market was down sharply, but it rose by more than 60% compared with the low of two and a half years ago.

Dr Rand, who compiled the latest global financial assets data for McKinsey Global Research Institute, pointed out that the book value of stocks has been steadily rising, accompanied by fluctuations in investors' valuation, which is based on investors' expectations of future earnings.

In other words, the trillions of dollars in value fluctuations are more representative of the volatility of investor sentiment rather than the volatility of the value of basic assets.

Moreover, sensational data such as trillions of dollars lost in market value may stimulate investor sentiment.

Karen Wong, head of equity investment portfolio management at Mellon Capital Management in San Francisco, said market value was largely related to sentiment.

She believes that much of what is going on in the market is very emotional.