The US economy continues to defy the predictions of economists of all stripes by neither collapsing nor breaking out on the upside. Instead, after an initial burst at the start of this recovery driven by inventory restocking, inflation-adjusted GDP growth seems to have settled into a less-than-satisfying growth rate of 1.5% to 2.0%. About half that growth is coming from non-US markets that have driven exports up to 14% of GDP, an-all time record.

In stark contrast to the weakness in Europe and the United States, growth in emerging markets remains robust. Companies serving developing markets are continuing to benefit from that growth, even as US results remain lackluster. In fact, large, multinational companies continue to report decent earnings, again largely based on strong overseas sales. Meanwhile, small businesses, which generally have less exposure to foreign markets, continue to struggle.