Breakingviews - Texas market bulls run into ferocious bear case

Jeffrey Goldfarb - Reuters - 08/04
Everything keeps getting bigger in Texas. In a sign of anticipated corporate growth, the New York Stock Exchange and Nasdaq are galloping to Dallas to prevent a new local stock market from wrangling their customers. The city has ambitions of becoming a far more powerful commercial hub, but for now there’s less substance than swagger.
  • BlackRock Inc
    Follow
  • Charles Schwab Corp
    Follow
  • Chevron Corp
    Follow
Show more companies
NEW YORK, April 8 (Reuters Breakingviews) - Everything keeps getting bigger in Texas. In a sign of anticipated corporate growth, the New York Stock Exchange and Nasdaq are galloping to Dallas to prevent a new local stock market from wrangling their customers. The city has ambitions of becoming a far more powerful commercial hub, but for now there’s less substance than swagger.
The Lone Star State is making a strong bid to muscle aside rivals east and west. Business-friendly regulation, stronger-than-average economic expansion, and recent backlash against socially conscious investing are helping it chip away at California’s technology dominance, Delaware’s legal supremacy and New York’s financial fortitude.
It would be a feat to unseat any one of these respective strongholds, let alone all three. Doing so would transfer substantial employment, wealth and consumption to a state that ranks worst, opens new tab in the country for quality of life, based on an annual CNBC study of places to do business. Texas scores poorly on healthcare, education and protections against discrimination, and its restrictive abortion ban also threatens to deter younger workers.
Money is talking loudly, though. On a per-capita basis, the state’s GDP is 25% smaller than California’s and in line with the U.S. average, but at $2.7 trillion, it produced enough goods and services last year to qualify as the world’s eighth-biggest economy, squeezed between France and Italy.
Column chart showing GDP growth rate in Texas, California, New York, Florida and USA from 2017 to 2024.
Governor Greg Abbott also can justifiably crow about growth. Texas added more than 180,000 jobs, the most of any state, in the year through February. More than 200 companies, including Tesla (TSLA.O), opens new tab and Chevron (CVX.N), opens new tab, moved, opens new tab their headquarters there between 2018 and 2023, nearly half the publicly traded ones that relocated over the span, real estate giant CBRE found. Many arrived from California, eighth on CNBC’s quality of life measure, escaping bureaucratic red tape and taxes on personal and corporate income.
The governor is also challenging Delaware, legal home to some 2 million businesses, and two-thirds of S&P 500 Index (.SPX), opens new tab members. Texas last year ro...
[Short citation of 8% of the original article]