Another record high for US equities and the markets’ sharp rebound in recent weeks do not necessarily inspire confidence that the world’s largest economy can fully escape global headwinds.

Much has been made by Wall Street about how the US economy can prosper and stand alone as the eurozone and Japan face intractable problems, China wrestles with slower growth, and the outlook dims for the likes of Russia and Brazil. Against this unsettling backdrop, the argument runs that US equities look good and stand to attract foreign buyers in part because the rising dollar helps boost the value of American holdings for overseas investors.

Drill a little deeper into the S&P 500’s performance and one discovers a less than soothing picture. Namely, the market’s rebound has been led by defensive sectors, notably utilities, consumer staples and healthcare stocks. Hardly a ringing endorsement of a robust US economy. Indeed, energy, materials and consumer discretionary sectors remain notable laggards during the current quarter, a performance that also typifies their behaviour this year.