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Capital Markets Fact Book, 2023

Capital markets recognize and drive funds to the best ideas and enterprises. Coupled with the free flow of capital, innovation is an integral component of job creation, economic development, and prosperity. Markets facilitate the transfer of funds from those who seek a return on their assets to those who need capital to expand.

Clients benefiting from healthy capital markets include not just individual investors but also institutional investors, governments, and corporations. Capital, raised through equity and debt, can be used to grow businesses, finance investments in new property, equipment, technology, and fund infrastructure projects. This funding creates jobs and pours money into the economy. Additionally, individuals and businesses can invest in securities to generate wealth.

The SIFMA Capital Markets Fact Book is an annual reference containing comprehensive data on the capital markets, investor participation, savings and investment, and securities industry.

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Fact Book Highlights

Section 1 – Global Capital Markets

Global fixed income markets outstanding decreased 3.2 % Y/Y to $129.8 trillion in 2022, while global long-term fixed income issuance decreased 17.5% to $22.5 trillion.

Global equity market capitalization decreased 16.2% Y/Y to $101.2 trillion in 2022, as global equity issuance drops to $0.4 trillion, a decrease of 61.2% Y/Y.

U.S. gross activity (purchases and sales) in foreign securities increased to $53.3 trillion in 2022, an increase of 1.0% Y/Y, while foreign gross activity in U.S. securities shrunk to $123.2 trillion, a decrease of 2.7% Y/Y in 2022.

Section 2 – U.S. Capital Markets

In 2022, U.S. Treasury securities issuance dropped to $3.8 trillion, a 25.5% decrease from the prior year. Long-term fixed income issuance declined 34.2% Y/Y to $8.9 trillion. Mortgage-backed securities (MBS) issuance decreased 53.2% Y/Y to $2.1 trillion, while corporate bonds fell 31.0% Y/Y to $1.4 trillion. U.S. long-term municipal bond issuance decreased 19.2% Y/Y to $390.8 billion, and asset-backed securities issuance volume decreased to 48.0% Y/Y to $302.8 billion. Federal agency securities increased 19.9% Y/Y to $830.9 billion.

Initial public offering (IPO) volume1 was $8.5 billion, down 94.4% from the previous year. Secondary, or follow-on, offerings totaled $78.5 billion, down 64.8% Y/Y. Total equity issuance, including common and preferred stock, totaled $99.4 billion in 2022, a 77.1% decrease Y/Y. Announced U.S. merger and acquisition (M&A) deals totaled $1.6 trillion in 2022, a 42.6% Y/Y decrease, while the value of completed M&A deals decreased 37.5% Y/Y to $16.9 trillion.

U.S. stock markets – in terms of index prices – fell in 2022 from record highs in 2021: the Dow Jones Industrial Average (DJIA) fell 8.8% Y/Y, ending the year at 3,147.25; the S&P 500 closed 2022 down 19.4% Y/Y at 3,839.50; the Nasdaq Composite decreased 33.1% Y/Y to close the year at 10,466.48; while the Russell 2000 fell 21.6% Y/Y to end the year at 1,761.25. In 2022, the average daily trading volume for equities was 11.9 billion shares, an increase of 4.1% Y/Y.

Section 3 – U.S. Investor Participation

Federal Reserve Board data showed the value of U.S households’ liquid assets decreased 11.0% Y/Y to $58.6 trillion. Of the total liquid assets held by U.S. households, 45.0% were in equities, 25.3% in bank deposits and CDs, and 16.5% in mutual funds, with the remaining 13.2% split between U.S. Treasury securities, agency and GSE securities, municipal bonds, money market funds, and corporate bonds. The latest data shows that 52.6% of households own equities.

Section 4 – Savings & Investment

The total value of U.S. retirement assets decreased 8.7% Y/Y to $41.8 trillion in 2022. Total pension assets went down by 11.0% Y/Y to $11.9 trillion, while assets held in individual retirement accounts (IRAs) decreased 17.4% Y/Y to $12.0 trillion. Of total U.S. retirement assets, 27.5% were in IRAs, followed by 28.4% in private pensions (defined benefit and contribution plans).

Section 5 – U.S. Securities Industry

The number of FINRA registered broker-dealers decreased 0.5% Y/Y to 3,378 in 2022.

Gross revenues for FINRA registered broker-dealers totaled $350.5 billion in 2022, a decrease of 12.1% Y/Y, while total expenses increased 0.4% Y/Y to $308.2 billion. As such, pre-tax net income fell to $42.3 billion in 2021, a decrease of 53.8% Y/Y.

National securities industry employment reached 1,073,500 jobs in 2022, an increase of 4.2% Y/Y.

About the Report

The SIFMA Capital Markets Fact Book is an annual reference containing comprehensive data on the capital markets, investor participation, savings and investment, and securities industry. The Fact Book amasses data from dozens of sources into a single, easily accessible reference tool to analyze key industry statistics.

Credits

SIFMA Research

Katie Kolchin, CFA, Director of Research
Justyna Podziemska
Daniel Hadley

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