With almost all companies having reported 3Q earnings, 74% of companies have beat earnings expectations. Revenue growth in the third quarter have shown particular strength, with revenue growing faster than expected.

Economists suggest it takes 10 years to get back to normal after a financial crisis. There could be a lot of life left in this expansion, now the third longest in U.S. history. We are in position for a potential breakout year.

Economic growth in the U.S. was revised upward to a rate of 3.1%, its fastest pace in almost two years. The second half of the year should see a slight softening of growth, offset by rebuilding from the hurricanes and the potential for fiscal stimulus in 2018.

Recent economic data has somehow suggested both improvement and softening. While we do see some continued upside in equities, we believe returns will be muted with slow but positive economic growth, which will limit corporate earnings growth.

Economic growth in the second quarter of 2017 increased largely due to increased non-residential investment and personal consumption. An increase in inventories took away from growth. We expect economic growth to remain stable for the second half of the year.

Although long and weak, elements that indicate continued expansion remain: the consumer has not greatly expanded its spending or debt, the housing market seems healthy with room to run, corporate investment is picking up. The economy doesn’t seem overextended.