Chart: Global Stock Markets Off to Worst Start in History
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Global Stock Markets Off to Worst Start in History [Chart]

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Global Stock Markets Off to Worst Start in History [Chart]

Global Stock Markets Off to Worst Start in History [Chart]

The first four trading days show optimism for 2016 is in short supply.

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

In our review of the economic events of 2015, we noted that the simple turning of a calendar page does not rectify the problems of the previous year.

The first week of trading on major exchanges has made this even more clear.

China’s Rough Start

China kicked off the volatility this week with multiple devaluations of the yuan to reduce the strain on its foreign reserves, after burning through $120 billion in the month of December.

In reaction to this news, as well as the updated manufacturing data out of China at the beginning of the week, the Chinese stock market plunged to start 2016. The “blue chip” CSI 300 index fell 7% on Monday to trigger a market intervention mechanism that halted trading. On Thursday the problems continued when the market opened down 5% almost instantly, triggering the same mechanism to provide a 15 minute trading break. Markets re-opened, plunged again, and got halted for the rest of the day.

Here’s what that whole 29 minute session looked like on Thursday, including the 15 minute break:

China's trading session on Thursday

This morning, the yuan was strengthened and it had a semi-calming effect. The CSI 300 finished up Friday’s trading in positive territory, but it is still down -9.9% for the first complete week of 2016.

The Spillover Effect

The whiplash from China’s tumultuous market was enough to put other global markets in a tizzy. This week’s Chart of the Week shows the first four days of trading on major world markets.

The S&P 500 and Dow Jones Industrial Average both opened 2016 with their worst four-day starts in history. The Nasdaq also was also down 6.4% in the first four days of trading, which took it into correction territory.

Canada’s TSX continued on its 19% decline since April 2015 and European markets have been hard-hit as well. Germany’s DAX was down 7.1% to start the year, and the FTSE 100 declined 4.8%.

Meanwhile, crude oil (WTI) is now $33, which is its lowest price in 14 years.

Yearly Starts Trending Worse

Another point we noted in the chart above is that the starts for the S&P 500 have been trending more towards negative territory each year since the Financial Crisis.

YearReturn
20090.4%
20102.4%
20111.3%
20121.6%
20132.5%
2014-0.6%
2015-1.6%
2016-4.9%

In recent times, it seems investors are starting each new year more anxious to pull the “sell” trigger. Proceed with caution in 2017.

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Markets

Mapped: Distribution of Global GDP by Region

Where does the world’s economic activity take place? This cartogram shows the $94 trillion global economy divided into 1,000 hexagons.

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Map of Global Wealth Distribution

Mapped: The Distribution of Global GDP by Region

Gross domestic product (GDP) measures the value of goods and services that an economy produces in a given year, but in a global context, it is typically shown using country-level data.

As a result, we don’t often get to see the nuances of the global economy, such as how much specific regions and metro areas contribute to global GDP.

In these cartograms, global GDP has been normalized to a base number of 1,000 in order to show a more regional breakdown of economic activity. Created by Reddit user /BerryBlue_Blueberry, the two maps show the distribution in different ways: by nominal GDP and by GDP adjusted for purchasing power parity (PPP).

Methodology

Before diving in, let us give you some context on how these maps were designed. Each hexagon on the two maps represents 0.1% of the world’s overall GDP.

The number below each region, country or metropolitan area represents the number of hexagons covered by that entity. So in the nominal GDP map, the state of New York represents 20 hexagons (i.e. 2.0% of global GDP), while Munich’s metro area is 3 hexagons (0.3%).

Countries are further broken down based on size. Countries that make up more than 0.95% of global GDP are broken down into subdivisions, while countries that are smaller than 0.1% of GDP are grouped together. Metro areas that account for over 0.25% of global GDP are featured.

Finally, it should be noted that to account for some outdated subdivision participation data, the map creator calculated 2021 estimates for this using the formula: national GDP (2021) x % of subdivision participation (2017-2020).

Nominal vs. PPP

The above map is using nominal data, while the below map accounts for differences in purchasing power (PPP).

Adjusting for PPP takes into account the relative value of currencies and purchasing power in countries around the world. For example, $100 (or its exchange equivalent in Indian rupees) is generally going to be able to buy more in India than it is in the United States.

This is because goods and services are cheaper in India, meaning you can actually purchase more there for the same amount of money.

Anomalies in Global GDP Distribution

Breaking down global GDP distribution into cartograms highlights some interesting anomalies worth considering:

  1. North America, Europe, and East Asia, with a combined GDP of nearly $75 trillion, make up 80% of the world’s GDP in nominal terms.
  2. The U.S. State of California accounts for 3.7% of the world’s GDP by itself, which ranks higher than the United Kingdom’s total contribution of 3.3%.
  3. Canada as a country accounts for 2% of the world’s GDP, which is comparable to the GDP contribution of the Greater Tokyo Area at 2.2%.
  4. With a GDP of $3 trillion, India’s contribution overshadows the GDP of the whole African continent ($2.6 trillion).
  5. This visualization highlights the economic might of cities better than a conventional map. One standout example of this is in Ontario, Canada. The Greater Toronto Area completely eclipses the economy of the rest of the province.

Inequality of GDP Distribution

The fact that certain countries generate most of the world’s economic output is reflected in the above cartograms, which resize countries or regions accordingly.

Compared to wealthier nations, emerging economies still account for just a tiny sliver of the pie.

India, for example, accounts for 3.2% of global GDP in nominal terms, even though it contains 17.8% of the world’s population.

That’s why on the nominal map, India is about the same size as France, the United Kingdom, or Japan’s two largest metro areas (Tokyo and Osaka-Kobe)—but of course, these wealthier places have a far higher GDP per capita.

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Energy

The Top 10 Biggest Companies in Brazil

What drives some of the world’s emerging economies? From natural resources to giant banks, here are the top 10 biggest companies in Brazil.

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The Top 10 Biggest Companies in Brazil Oct 10 Share

The Top 10 Biggest Companies in Brazil

In 2009, the at-the-time emerging economies of Brazil, Russia, India, and China held their first formal summits as members of BRIC (with South Africa joining in 2010).

Together, BRICS represents 26.7% of the world’s land surface and 41.5% of its population. By GDP ranking, they’re also some of the most powerful economies in the world.

But what drives their economies? We’re highlighting the top 10 biggest companies in each country, starting with Brazil.

What Are the Biggest Public Companies in Brazil?

Brazil isn’t just one of the largest and most diverse countries in the world, it is also an economic powerhouse.

With over 213 million people, Brazil is the sixth most populous country on Earth and the largest in Latin America. It’s also the wealthiest on the continent, with the world’s 12th-largest economy.

Once a colony focused on sugar and gold, Brazil rapidly industrialized in the 20th century. Today, it is a top 10 exporter of industrial steel, with the country’s economic strength coming chiefly from natural resources and financials.

Here are Brazil’s biggest public companies by market capitalization in October 2021:

Top 10 Companies (October 2021)CategoryMarket Cap (USD)
ValeMetals and Mining$73.03B
Petróleo BrasileiroOil and Gas$69.84B
AmbevDrinks$43.87B
Itaú UnibancoFinancial$41.65B
Banco BradescoFinancial$34.16B
WEGIndustrial Engineering$29.43B
BTG PactualFinancial$25.01B
Banco Santander BrasilFinancial$24.70B
Rede D’Or Sao LuizHospital$23.79B
XP Inc.Financial$22.45B

At the top of the ranking is Vale, a metals and mining giant that is the world’s largest producer of iron ore and nickel. Also the operator of infrastructure including hydroelectricity plants, railroads, and ports, It consistently ranks as the most valuable company in Latin America.

Vale and second-ranking company Petróleo Brasileiro, Brazil’s largest oil producer, were former state-owned corporations that became privatized in the 1990s.

Finance in Brazil’s Top 10 Biggest Companies

Other than former monopolies, the top 10 biggest companies in Brazil highlight the power of the banking sector.

Five of the 10 companies with a market cap above $20 billion are in the financial industry.

They include Itaú Unibanco, the largest bank in the Southern Hemisphere, and Banco Santander Brasil, the Brazilian subsidiary of Spanish finance corp.

Another well-known subsidiary is brewing company Ambev, which produces the majority of the country’s liquors and also bottles and distributes PepsiCo products in much of Latin America. Ambev is an important piece of Belgian drink juggernaut Anheuser-Busch InBev, which is one of the world’s largest 100 companies.

Noticeably missing from the top 10 list are companies in the agriculture sector, as Brazil is the world’s largest exporter of coffee, soybeans, beef, and ethanol. Many multinational corporations have Brazilian subsidiaries or partners for supply chain access, which has recently put a spotlight on Amazon deforestation.

What other companies or industries do you associate with Brazil?

Correction: Two companies listed had errors in their market cap calculations and have been updated. All data is as of October 11, 2021.

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