The World’s Top 100 Stocks Have Lost More Than 20% in 2022, but America Remains Hegemonic.
Uncle Sam's country is home to four of the world's five largest companies, and 15 of the 20 largest.
Wall Street and tech have been at the forefront of the global stock market plunge this year. But this does not prevent American companies, starting with Big Tech, from maintaining their hegemony on the world stock markets. Admittedly, the top 100 global capitalizations have melted by more than 20% since the beginning of 2022, going from a total of $36,700 billion to $30,610 billion as of June 27, 2022, according to Bloomberg data.
But the stock market crash has affected all global markets, not just Wall Street. As a result, the US share fell by only 3 points, from 69% to 66%. Tech has been hit hard, but it remains the world's leading sector. It still accounts for 32% of the market value of the world's top 100 capitalizations at the end of June 2022 (37% at the beginning of 2022), with nearly $10 trillion.
China's rise to power comes to a halt
It must be said that the stock market trajectory of tech over the last decade has been exponential. Ten years ago, the sector weighed less than 15% of the total of the world's top 100 capitalizations, and the oil major Exxon still held the top spot ahead of Apple. The long-term trend is clear: the rise in the value of the largest technology companies is here to stay.
The sector's behemoths would have to collapse completely on the stock market to shake up the stock market hierarchy, or they would have to fall behind the rest of the market for a long time.
The technology sector's wild ride has mainly benefited the United States, from where the Big Tech behemoths have spread. Uncle Sam's country is home to four of the world's five largest companies, and 15 of the 20 largest. No other country is in a position to overshadow the United States and its 59 companies listed among the 100 largest in the world.
China's rise to prominence came to an abrupt halt with the sharp fall in local markets. The second most represented country in the ranking, it weighs less than 10% of the total with 13 companies (15 including Hong Kong). Saudi Arabia follows, with only one company: the gigantic Saudi oil company, Aramco. This is the only company that has overshadowed Apple in recent months, thanks to the soaring price of black gold. Aramco is also the only non-American and non-technology company to exceed the $1,000 billion capitalization threshold.
The rest of the world is struggling. Within the European Union, France still manages to do well thanks to a combination of growth companies in the luxury sector and some global giants in their sectors. It ranks fifth, behind Switzerland, but ahead of the UK. Even though LVMH has ceded its place as the largest capitalization in the Old Continent to Nestlé, the global luxury champion remains a stock market heavyweight, as it is the 23rd largest listed company at the end of June 2022.
L'Oréal follows, then TotalEnergies and Sanofi, which entered the Top 100 this year thanks to the recent good stock market performance of energy and pharmaceuticals. Hermès, on the other hand, is still at the door of the ranking with a valuation of $118 billion at the end of June 2022, compared to $120 billion for the last of the Top 100, the American Medtronic.
We will have to see if this global stock market downturn continues to grow in the months to come due to the risks of persistently high inflation and a possible recession that many see coming to America in Q4 2022 or Q1 2023. In any case, since this is a global situation, it is a safe bet that the American tech giants will continue to dominate the top spots with Apple as the undisputed king.
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