US equities are “too big to fail.”

That was one, among many, takeaways from what I have to say was a pretty good Q3 US equity lookahead piece from SocGen’s Manish Kabra.

“Pretty good” is high praise coming from me. Over the years, I’ve come to question the value of most professional analysis, but Kabra’s latest struck a nice balance between hitting the high points (which is really all you can do given the impossibility of forecasting the near-term direction of equity prices) and delving just deep enough below the surface to keep things interesting for clients who can recite the overarching macro-market narrative from memory.

US stocks are “by far the biggest asset class,” Kabra remarked, 15 pages in, in the course of noting that the equity market’s now more than twice the size of the real economy.

As the chart shows, the trajectory of this dynamic’s alarming, particularly given how fast GDP’s growing. If you include all financial assets, “Wall Street,” as it were, is worth 5x “Main Street.”

Although US equity ownership’s famously narrow in terms of the share concentrated in the hands of the rich, six in 10 families own at least some stocks, according to the Fed. “Essentially, US stocks have become too big to fail for a majority of Americans,” Kabra wrote.

Globally, US equities are “too big to ignore,” he went on. I’ve seen the charts below before, and maybe you have too, but they never fail to make an impression, particularly the visual on the right.

If you have seen them previously, note that these are up to date. Kabra published them with his Q3 outlook piece this week.

The only thing that’s “exceptional” about the US is big-cap tech. Without that, US corporates are no better than their global counterparts, at least when it comes to profit growth.

“American exceptionalism is all in one index: The Nasdaq 100,” Kabra wrote. “Take out the Nasdaq 100 and the S&P 500’s profit levels are not much different from those of global equities.”