U.S. Stocks Now Worth Less Than Rest of G-8: Chart of the Day

By Lee J. Miller

July 7 (Bloomberg) -- As President George W. Bush meets with counterparts from the Group of Eight nations, he faces a new deficit: U.S.-traded stocks have declined to less than the combined value of those from the rest of the G-8, according to data compiled by Bloomberg.

The combined value of companies traded on equities exchanges in Japan, the U.K., France, Canada, Germany, Italy and Russia was $15.16 trillion at the end of trading on July 4. Market value in the U.S. totaled $14.95 trillion, the data show.

The chart of the day compares the value of U.S.-traded shares and the capitalization in the seven other G-8 nations. Values are in dollars to account for currency shifts. The U.S. has trailed its seven counterparts since June 21.

``A sharp reversal began in early June,'' Goldman Sachs Group Inc. said in a report from Tokyo. ``Housing prices continue to decline rapidly, the credit crunch is becoming increasingly evident in lending data, oil is marking new highs, and -- last but not least -- the labor market is unraveling,'' the report said.

The market capitalization of the rest of the G-8 nations first exceeded the U.S.'s on Nov. 7, 2007, when Washington Mutual Inc., the largest savings and loan, plunged the most in 20 years. The dollar also fell to the lowest in 30 years against a basket of six major currencies that day. The value of U.S.- traded shares then regained the top position most of the time through March, show the data, which date back five years.

Leaders of the U.S., Japan, Germany, the U.K., France, Italy, Russia and Canada are meeting from today to July 9 in Toyako, Japan. It will be Bush's final G-8 summit as president.

``The U.S. believes in a strong dollar policy,'' Bush said at a news conference with Japanese Prime Minister Yasuo Fukuda yesterday. The economy of the U.S. remains fundamentally strong even as growth has slowed, he said.

DBS Group Holdings Ltd. said in a report today to ``expect lots of comments regarding the world's growing concern about the weakness of the U.S. dollar, especially its link in driving up oil prices and fanning global inflation.''

To contact the reporters on this story: Lee J. Miller in Bangkok at lmiller@bloomberg.net