MSNBC publishes a Financial Times article:
Europe has eclipsed the US in stock market value for the first time since the first world war in another sign of the slipping of the global dominance of American capital markets. Europe's 24 stockmarkets, including Russia and emerging Europe, saw their capitalisation rise to $15,720bn (€11,819bn) at the end of last week, according to Thomson Financial data. That exceeded the $15,640bn market value of the US. (...)The Independent calls the shift "a historic occasion," but also describes the criticism of the comparison between the European continent and the United States:
The shift mirrors a trend in the debt world, where European activity has caught up, and in some cases overtaken the US.European shares have outperformed the US, with their market capitalisation rising 160 per cent since the start of 2003 in dollar terms, said Thomson Financial. That compared with a 70.5 per cent rise for the US stock market. Over that time the euro has risen 26 per cent against the dollar.
For the record, the figures come from Thomson Datastream, not the traditional calculators of indices, such as FTSE or MSCI. These others strip out government holdings and other shares that are not generally available to investors, which lowers the value of European markets, which include many partly privatised companies and the like. The first reaction of many on Wall Street yesterday was to dismiss the figures as a distortion or an irrelevance. Russia shouldn't be included as part of Europe, some said. Others asked, what is the point of a comparison with a geographical area that covers two and a half times as many people as the US? And still more said that FTSE and MSCI figures better reflected the size of the equity market available to investors, where the US still wins by anything from 15 per cent to a third. Fair points all, but none diminish the significance of the underlying trend identified in the Thomson figures.The Independent also points out:
Now that the news is out there, it has immediately been pitched into the argument over whether New York is in danger of losing its position as the financial capital of the world. For London, it is another piece of evidence to back the Stock Exchange's boasts that it is attracting foreign companies that would previously have looked to list in the US. And for some Wall Streeters, it adds new urgency to their calls for looser regulation and other measures to win back lost business.Usually there are calls for looser regulation in Europe rather than in Wall Street... (Thanks to Zyme for pointing out this story.)