Exceptionally Fortunate

The concept of "American exceptionalism" has re-entered heavy rotation in the news cycle, debated with the lopsided heat-to-light ratio typical of campaign years. Less discussed is the starkly exceptional performance of American equities, compared with most other world stock markets, and the question of whether it will continue. Following the late-week buying and short-covering spree that lifted the S&P 1.7% last week, to 1,386, only about 2.3% off its 2012 high, the benchmark is up 10.2% in 2012. The rotation benefiting America is part of the global surge in stability-seeking and defense-playing. Interestingly, the world-wide hunt for stability and yield that has poured money into America is under way at a time when emerging markets have rarely been so stable.