David Kelly, Chief Global Strategist at JPMorgan Asset Management, calculated that the market value of all US corporate equity now exceeds 400% of GDP, a level never seen before: 244% before the pandemic, 204% at the dot-com peak in 2000, and 74% before the 1987 crash. A McKinsey Global Institute study corroborated this warning, estimating total global wealth at approximately $600 trillion, or 5.4 times global GDP, with 36% of the $400 trillion increase since 2000 consisting of what McKinsey calls paper gains unrelated to productive investment. Kelly warned that elevated equity valuations combined with high corporate profit shares create vulnerability to economic shocks, with each prior extreme in this ratio having preceded significant market turbulence.
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