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U.S. stocks are outperforming the rest of the world by the biggest margin in eight years as Europe’s financial crisis and China’s slowing growth make America's troubles seem tame.
Despite this week's stumble, the S&P 500 is up nearly 7 percent year-to-date, versus a 3 percent decline for the MSCI World Ex-U.S. Index this year.
For example, France’s CAC 40 Index is off nearly 3 percent, while China’s Shanghai Index is down 3 percent in 2012.
“With this trend still in place, we believe investors should continue to overweight U.S. stocks, and more specifically, U.S. stocks which generate the majority of their sales in the U.S.,” wrote an analyst from Bespoke Investment Group, the research firm which brought this milestone to light in a note to clients.
Bespoke has been tracking the S&P 500 versus the MSCI World Ex-U.S. Index since 2000, where it set the values of both as equal. Since then, U.S. stocks hit their relative low in the aftermath of the failure of Lehman Brothers , which was caused by a housing crisis centric to America.
The divergence is even more pronounced over the last 12 months, with the S&P 500 slightly positive and the rest of the world down by a whopping 20 percent.
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