Capital markets drive capital to the best ideas and enterprises, serving as a catalyst for innovation, opportunity and dynamism. Clients benefiting from healthy capital markets include not just investors but also corporations and governments. Capital, raised through equity and debt, can be used to grow businesses, finance investments in new plant, equipment and technology and fund infrastructure projects. This creates jobs and flows money into the economy. Additionally, businesses and individuals can invest in securities to generate wealth.

In 2018, the securities industry raised $2.4 trillion of capital for businesses through corporate debt and equity issuance activity in the United States. While a 10.8% decrease from last year’s post-crisis high, it is the fifth highest issuance on record in our 15 year dataset. Results were mixed across asset classes, with equities +0.4% and fixed income -11.8%, which was driven by a 19% decline in corporate bonds as issuers and investors worried about rising interest rates, the withdrawal of central bank stimulus and increased concern over corporate debt levels.

Here are more highlights from market activity in 2018:

Fixed Income Markets

1. U.S. fixed income markets 40.2% ($41 trillion) of the $103 trillion global securities outstanding, or 1.9x the next largest market, the EU (ex-U.K.)
2. U.S. fixed income outstanding breakout: 37% U.S. Treasuries; 23% mortgage-backed securities; 22% corporate bonds; 9% municipal bonds; 4% agency debt; & 4% asset-backed securities
3. U.S. issued $5.5 trillion in fixed income securities, -2.7% Y/Y and -25.1% from the 2015 peak

Equity Markets

4. U.S. equity markets 41% ($30 trillion) of the $75 trillion in global equity market cap, or 3.8x the next largest market, the EU (ex-U.K.)
5. U.S. issued $204 billion in equities, +6.2% Y/Y but still down 22.2% from the 2014 peak
6. U.S. IPOs totaled 50 billion, +27.1% Y/Y (increases/decreases vary by type of security) but still down 46.7% from the 2014 peak

Retirement Assets & Savings

7. There are $35 trillion of U.S. retirement assets (-1.3% Y/Y, 2017 was the peak year), broken out by: 27.2% private retirement plans; 26.3% state and local government pensions; 25.4% IRAs; 11.6% federal government pensions; and 9.4% insurance company annuities
8. U.S. household liquid financial assets were $42 trillion (-1.6% Y/Y, 2017 was the peak year), broken out by: 38.2% equities; 26.4% deposits; 18.5% mutual funds; 6.1% U.S. Treasuries; 4.2% municipal bonds; 4.1% money market funds; and 2.6% corporate bonds
9. 2017 U.S. household savings rate was 6.9% (flat Y/Y, down 2.3% from the 2012 peak); both German and French households save more than the U.S., 9.9% and 8.5% rates respectively

Securities Industry

10. There are 14.4 thousand financial services firms registered in the U.S., 3.6 thousand of which are broker-dealers; this is an 8.6% Y/Y decline, down 40.9% since 2004 (-3.2% and -30.5% for broker-dealers)
11. There are 970 thousand securities industry employees in the U.S., with 21%/19% in New York State/New York City; this is up 2.7% Y/Y, and +17.4% since 2004
12. FINRA registered broker-dealer revenues $367 billion, +18.9% Y/Y and a 5.9% CAGR since 2014; operating expenses $322 billion, +19.2% Y/Y and a 5.4% CAGR since 2014

Slide Show

Walk through key facts about market activity as well as investor participation, savings and investment, and the securities industry in this slideshow from SIFMA Research featuring highlights from the 2019 Capital Markets Fact Book. Then, download the 2019 Fact Sheet and dive deeper with the full Fact Book and Data Tables.

Katie Kolchin is a Chartered Financial Analyst and head of SIFMA Research. Justyna Podziemska is an Assistant Vice President for SIFMA Research.