10 Key Facts About the Capital Markets

Capital markets are the bedrock of a nation’s economy, recognizing and driving funds to the best ideas and enterprises. Markets facilitate the transfer of funds from those who seek a return on their assets – individual and institutional investors – to those who need capital to grow and expand: governments and corporations who seek to grow businesses, finance investments in new property, equipment, technology, and fund infrastructure projects. Additionally, individuals and businesses can invest in securities to generate wealth.

U.S. capital markets are the largest and among the deepest and most liquid in the world. In 2021, capital markets provided 75.4% of equity and debt financing for non-financial corporations in the U.S. This funding creates jobs and pours money into our national economy.

Pulled from SIFMA’s 2022 Capital Markets Fact Book, here are 10 facts about the capital markets:

Fixed Income Markets

1. Global fixed income markets outstanding increased 3.3% Y/Y to $126.9 trillion, while global long-term fixed income issuance decreased 3.7% to $26.8 trillion. U.S. fixed income markets comprise 38.7% of the $126.9 trillion securities outstanding across the globe, or $49.1 trillion; this is 2.0x the next largest market, the EU.
2. U.S. Treasury securities issuance reached $5.1 trillion, a 31.9% Y/Y increase. Total long-term fixed income issuance rose 7.7% Y/Y to $13.4 trillion; mortgage-backed securities (MBS) issuance increased 7.3% Y/Y to $4.6 trillion; and asset-backed securities issuance volume rose 91.2% Y/Y to $581.9 billion.
3. Corporate bonds fell 13.9% Y/Y to $2.0 trillion. Elsewhere, U.S. long-term municipal bond issuance decreased 0.9% Y/Y to $480.4 billion, while federal agency securities decreased 44.6% Y/Y to $692.9 billion.

Equity Markets

1. Global equity market capitalization increased 16.6% Y/Y to $124.4 trillion. Global equity issuance rose to $1.0 trillion, an increase of 25.6% Y/Y. U.S. equity markets represent 42.0% of the $124.4 trillion in global equity market cap, or $52.2 trillion; this is 3.6x the next largest market, China.
2. Initial public offering (IPO) volume in the U.S. was $153.5 billion, up 79.7% Y/Y. Follow-on, or secondary, issuance totaled $224.7 billion, down 13.0% Y/Y. Altogether, equity issuance, including common and preferred shares, totaled $436.2 billion in 2021, an 11.7% increase Y/Y.
3. Announced U.S. merger and acquisition deals totaled $2.6 trillion in 2021, a 76.2% Y/Y increase. However, the value of completed M&A deals increased just 17.8% Y/Y to $10.1 trillion.
4. Before posting their worst total returns in 50 years in 1H22, U.S. stock markets set record highs in 2021. The Dow Jones Industrial Average (DJIA) rose 18.7% Y/Y, ending the year at 36,338.30; the S&P 500 Index closed 2021 up 26.9% Y/Y at 4,766.81; the Nasdaq Composite Index increased 26.6% Y/Y to close the year at 16,320.08; while the Russell 2000 Index gained 13.7% Y/Y to end the year at 2,245.31. In 2021, the average daily trading volume for equities was 11.4 billion shares, +4.4% Y/Y.

The Individual Investor

1. The value of U.S. households’ liquid assets increased 13.8% Y/Y to $65.7 trillion, according to Federal Reserve Board data. The total value of U.S. retirement assets increased 8.3% Y/Y to $45.8 trillion.
2. 52.6% of households own equities. More on why that matters here.

The Securities Industry

10. National securities industry employment reached 1,016,900 jobs, an increase of 4.6% Y/Y. The number of FINRA registered broker-dealers decreased 1.2% Y/Y to 3,394 in 2021.

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

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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.