Here’s my quick visual snapshot of global share markets in 2025, with data to 18 December (full report in early January).
Key points:
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- 2025 was the third straight year of good positive returns on most share markets.
- Australia lagged the US by a big margin again for a third year.
- Three-year booms are not unusual – there have been plenty of examples of longer booms before a bust.
- Pricing is currently very expensive – not just US tech stocks but everywhere including Australia.
- However, share markets do not collapse because or when they become expensive. Over-priced booms can keep running up into even more over-priced territory for several years before collapsing.
Today’s chart shows broad stock market indexes per calendar year in 60+ major country stock markets around the world. (These are interim results to 18 December 2025. Look out for my full year reports in January.)
In each year I highlight the US (S&P500 index, marked by red bars) and Australia (All Ordinaries index, marked by green bars), in order to see clearly how they stack up against other global share markets.
Global market contagion
I mainly use this chart to illustrate the fact that share market booms and busts are global phenomena. As the US has the world’s largest economy and capital markets, what happens in the US echoes in other markets around the world, regardless of local conditions and pricing in each country.
When US markets are booming, global investors (which are mainly US investors) spray money around the world and virtually all markets benefit, regardless of local conditions of pricing. Conversely, when US markets are tanking, global investors (ie US investors), pull their money back to the safety of US cash and US treasuries, and all markets fall.
The current boom is led by big US tech/Ai stocks, and the general confidence (or over-confidence) is also lifting share prices in most other countries.
US leading the current boom
We can see that the US again posted good positive returns in 2025 but not as good as in the previous two years. In 2023 and 2024 the US market led most other share markets, but in 2025 the US is still positive but this time most other markets (black circles) are ahead of the US (mainly Japan, Canada, UK, Spain, Italy, Eastern European markets, Latin American markets, South Asia, East Asia, Africa, and even Russia beat the US in 2025. In fact everywhere except South East Asian markets, and Australia, beat the US in 2025).
This is because the US tech stars took a breather in 2025 thanks to (justified) investor concerns over their expensive pricing, and also (justified) investor concerns that they are unlikely to get decent returns from the hundreds of billions of dollars they are spending on ai models and ai infrastructure (eg data centres).
Despite the more modest gains on the US stock market in 2025, it is still a decent three year boom so far. . . .
(I will cover these in more detail in the New Year.)
Few negative returns in 2025
The main exceptions to the overall bullish trend in 2025 were Denmark (Ozempic maker Novo Nordisk giving up last year’s gains to US competitor Eli Lilly), Saudi Arabia (oil price down heavily), and a few smaller markets like Thailand, Philippines, Slovakia.
Australia lags
We can see from the green and red bars that Australia is lagging the US by a big margin again for a third year.
Miners beat banks on the local ASX market this year but the big drag on the overall market were international problems for companies like CSL, Sonic, Cochlear, Aristocrat, Amcor, Hardie, Reece, Domino’s, Xero, Lendlease. ‘Ai’ fears dragged down REA and CarSales, plus there were more own goals from our main ‘tech’ star, Wisetech. Oooops!
Three years of boom
Three-year booms are not unusual. There have been plenty of longer booms in past cycles, including some shown on the chart. For example, the five-year boom in 2003-7 before the 2008 GFC sell-off. There was a similar long boom in the mid-late 1990s, which was ended by the three-year bust in 2000-2 (shown at the left of the chart).
When will it end?
There are at least seven things we can say for certain –
First - The current speculative boom will end in a big bust like every other speculative boom in the past.
Second - The longer and higher the boom, the longer and deeper the bust, especially when leverage is involved.
Third – Share prices are currently very expensive on a host of different measures. Not just US tech stocks, but other shares and other share markets everywhere, including Australia which has virtually no tech stocks.
Fourth – share markets don’t collapse because or when they become expensive. Over-priced booms can run up into even more over-priced territory for many years before collapsing – for example, the 1920s and 1990s in the US, and 1980s in Japan.
Five – What turns booms to busts is usually a combination of triggers – often monetary and/or fiscal tightening, regulatory attacks, bankruptcies, military flare-ups.
Six – when the speculative bubble stocks collapse, they drag down the rest of the market, including unrelated shares and unrelated share markets around the world.
Seven – big busts often trigger broad economic contractions, especially when leverage is involved (leverage at company level, at individual investor level, and in the banking system).
What about pricing?
On the subject of pricing - I have researched and written extensively about this, including my recent six-part series -
- World share market pricing - Part 3: Forward P/E ratios and earnings growth assumptions – The US market is actually better placed than most! (20 Aug 2025)
To put the current boom in context, see also -
I thank you for your time and attention. Look out for my usual full year reports on markets and portfolios in January.
‘Till next time – safe investing!