U.S. economy continues to grow

The real U.S. economy increased at an annualized rate of 2.8% in the third quarter of 2013, according to the latest estimate from the U.S. Commerce Department.

The continuation of positive growth, coupled with falling unemployment and a rising stock market, has provided a nice boost to U.S. consumer confidence and spending. The majority of economically sensitive stocks continue to meet or exceed profit estimates, which is an additional signal that the United States appears to be in a moderate but more sustainable economic recovery. This recovery, now in its fifth year, has been particularly strong for domestic small-cap stocks. Part of the reason is that small-cap companies derive 81% of their revenue from the U.S., while that figure is 64% for large-caps. (Source: FactSet Research Systems; BofA Merrill Lynch Small Cap Research.)

The views expressed represent the investment manager's assessment of the market environment as of November 2013, and should not be considered a recommendation to buy, hold, or sell any security, and should not be relied on as research or investment advice. Views are subject to change without notice and may not reflect the investment manager's current views.

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Notes from the desk