Signal US equities at 3.7 times GDP make up nearly 40% of household wealth

Summary

MGI reports that US equities are at all-time highs, worth 3.7 times GDP and 2.4 times corporate net assets. They also make up nearly 40 percent of US household wealth. The report clarifies that the GDP multiple and the share of wealth cover the equity of all corporations, whereas the net-asset multiple refers only to nonfinancial corporations. With so much household wealth tied to share prices, a correction could lead to a sharp pullback in demand and a long stretch of low growth. MGI therefore argues that corporate earnings must deliver on the high expectations priced into the market, while flagging AI disappointment or geopolitical disruption as possible triggers of a reset.