I am not sure if my previous reply got posted, so replying again.

This is a good point. Logically, there should be an influence of US companies’ foreign business in their market cap, which would contribute to upward drift in Market cap to GDP ratio. However, I suspect it is not a significant driver of the trend.

One can look at it in two ways –
1. Using US GNP instead of GDP in the ratio, to account for foreign income of US firms. Over last 20 yrs US GNP has been approx. 1% higher than GDP. Thus, Mkt cap/GNP ratio shows very similar trend and values as Mkt cap/GDP.

2. US Mkt cap to World GDP trend, as a rough way of assessing influence of global GDP growth on US mkt cap. This ratio also shows very similar trend as US Mkt cap/ US GDP (0.39 in 2019). This suggests that either US firms are rapidly gaining share in World economy (at the cost of all other countries), to currently be worth 39% of World GDP, or the markets are overvalued (more likely). This, at a time when US GDP has been falling as a proportion of World GDP.

Thus, one can see that the markets are overvalued even with these metrics.