US equities outperform Australia's despite greater sovereign risk

The tables here show the performance since the beginning of 2003 of the All Ordinaries - the Australian equities index that includes the 500 largest Australian companies by market capitalisation - and the Dow Jones Industrial Average - an index of 30 large publicly-traded US stocks. Last week the Dow passed a significant milestone, topping the high achieved just prior to the GFC downturn. At the same time, the All Ords hit a 5-year high, beating the previous post-GFC high reached in 2010.

All Ords 2003 to now.

Things are obviously looking up for employers in both countries. But I think it is strange that this has happened at a time when US federal debt is $16.6 trillion, while Australian federal debt is around $250 billion, a fraction of the US sovereign risk. A trillion is a thousand billion.

Dow Jones 2003 to now.

Currency traders are more rational, it seems to me, and are keeping the Aussie dollar high (it is currently about $1.02 US). But if anyone has a reasonable explanation for the strength of the US economy despite the high sovereign risk there, I'd like to hear it.