10 Facts About the US Capital Markets

Capital markets recognize and drive capital to the best ideas and enterprises. Their health and efficiency finance the real economy, allocate risk, and support economic growth and financial stability.

Nowhere is this more apparent than in the United States, which are the largest in the world and continue to be among the deepest, most liquid, and most efficient.

To illustrate, in 2020, the U.S. securities industry raised $2.7 trillion of capital for businesses through corporate debt and equity issuance activity, a 60.4% increase from the prior year. This represents 73% of funding for economic activity in the U.S., in terms of equity and debt financing of non-financial corporations.

Here are 10 more facts about the U.S. capital markets in 2020:

Equity Markets

1. U.S. equity markets represent 38.5% of the $105.8 trillion in global equity market cap, or $40.7 trillion; this is 3.7x the next largest market, the EU.
2. Equity issuance in the U.S., including common and preferred shares, totaled $390.0 billion in 2020, a 71.0% increase year-over-year. Initial public offering (IPO) volume was $85.3 billion in 2020, up 74.7% from $48.8 billion in 2019. Follow-on, or secondary, issuance totaled $258.5 billion in 2020, up 77.8% from 2019.
3. U.S. stock markets increased across the board in 2020: the Dow Jones Industrial Average rose by 7.2%, the S&P 500 Index was up 16.3%, the Nasdaq Composite Index increased by 43.6% and the Russell 2000 Index gained 18.4%.

Fixed Income Markets

4. U.S. fixed income markets comprise 38.3% of the $123.5 trillion securities outstanding across the globe, or $47.2 trillion; this is 1.9x the next largest market, the EU.
5. Fixed income issuance totaled $12.2 trillion in 2020, up 48.1% from 2019. The greatest issuance increase was in mortgage-backed securities, +96.2% to $4.0 trillion, followed by corporate bonds at 60.4% to $2.3 trillion and Treasury securities at +32.7% to $3.9 trillion.

Investor Participation, Savings & Investment

6. Federal Reserve Board data showed the value of U.S. households’ liquid assets increased by 16.7% to $58.5 trillion in 2020 from $50.2 trillion in 2019. Of total liquid assets held by U.S. households, 44.2% was in equities, 23.4% in bank deposits and CDs and 19.2% in mutual funds.
7. According to the latest survey from the Federal Reserve, 53% of American households own stocks, whether directly or indirectly.
8. The total value of U.S. retirement assets increased by 8.1% to $41.8 trillion in 2020, according to Federal Reserve. Total private pension assets, both defined benefit and defined contribution plans, rose 8.8% to $11.9 trillion while assets held in individual retirement accounts (IRAs) increased by 12.5% to $12.2 trillion.

The Securities Industry

9. The number of FINRA-registered broker-dealers decreased by 2.3% to 3,435 in 2020.
10. National securities industry employment, as reported by the U.S. Department of Labor, reached 975,600 jobs in 2020, an increase of 0.9% year-over-year. The number of those jobs located in New York State and New York City declined 3.1% and 3.3% respectively, to 197,200 and 177,200.

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More data and statistics are available in the Capital Markets Fact Book from SIFMA Research, an annual reference containing comprehensive data on the capital markets, investor participation, savings and investment, and securities industry.

Katie Kolchin, CFA is Director of Research for SIFMA. A global equity research analyst with a background in market infrastructure and capital markets, she leads the team performing data and analysis work for the Association and is the author of SIFMA Insights.