Floyd Norris asks how well the US Market has done relative to other global markets.
The answer? On a comparitive basis, not great. Better than China, but not as good as 22 other national markets.
Its not just the emerging markets, either: Austria, Norway, Finland, Greece, Spain, Canada, Germany, Ireland, France, Italy, Siwetzerland, the Netherlands, Japan, Britain and Hong Kong all out performed the United States. Norris notes that the "most impressive fact is how widespread stock market
profits have been throughout the world, despite all the talk of slow
growth in Europe and Japan."
The chart below shows which were the best performing regions in the world.
click for larger graphic
graphic courtesy of NYT
Here’s an excerpt:
"As for the United States, much of its economic vigor has helped companies in other countries as the American trade deficit has soared. Bob Prince of Bridgewater Associates, a money management firm, argues that a repricing of American assets is needed to continue drawing in foreign capital. He notes that the difference between American interest rates and those in Europe and Asia has been growing for more than a year.
If that continues, it will mean that American companies have to pay more for capital — either equity or debt — than overseas competitors. That will make it more difficult for them to compete. Mr. Prince argues the trend will continue until American growth slows enough — or the dollar falls enough — to begin to cut the trade deficit and thus reduce the American need for investment from overseas."
China and U.S. Are World’s Growth Engines and Its Market Laggards
Off the Charts
NYT, April 1, 2006