Salient to Investors:

A confluence of economic forces is likely to continue to produce good times for the biggest American companies — and the stock market — even if growth, as expected, slows in the coming months.

Investors are focusing on prospects for healthier growth late in 2013 and into 2014. Bullish traders count on a supportive Bernanke much as their predecessors did in the 1990s with Greenspan.

American giants are benefiting from productivity gains and renewed growth in China and elsewhere, allowing them to increase profits even if domestic remains lackluster.

Howard Silverblatt at Standard & Poor’s says big companies have found a way to prosper despite the broader economy and all the uncertainty – a disconnect between them and the rest of the world. Silverblatt says 22 percent of the total S&P 500 profits will come from the 10 largest companies, versus 18 percent in 2010.

The American economy is expected to slow to around 1.5 percent in the next two quarters as higher payroll taxes and automatic government spending cuts begin to bite.

Wall Street expects the largest companies to report strong Q1 results – 6.6 percent for the 100 largest companies in the S&P 500 versus a drop of 1.6 percent for the bottom 100.

Sageworks says that over the last 3 years, sales at  privately owned companies with revenue of more than $50 million have grown an average of 15.3 percent annually, versus 8.5 percent annual growth for firms with less than $50 million in revenue.

William C. Dunkelberg at the National Federation of Independent Business says the economy is bifurcated, and while corporate profits are at a record, small business is dead in the water.

Big companies enjoy much easier access to credit than smaller companies and the automatic budget cuts and increase in Social Security taxes will fall more heavily on smaller, domestically focused firms than on multinational giants.

Ian Shepherdson at Pantheon Macroeconomic Advisors says smaller companies face greater headwinds.

While total employment at GE fell slightly to 305,000 in 2012 from 316,000 in 2005, the number of workers in the United States fell to 134,000 from 161,000 in 2005, while the proportion of sales from the US fell to 47 percent from 55 percent.

Ethan Harris at Bank of America Merrill Lynch said the current slowdown will be the last for a while, and expects annual growth rates of 1.3 percent in Q2, 1.5 percent in Q3, and 2.5 percent in Q4 and 2014.

Chris Varvares at Macroeconomic Advisers said that for people who spend all of their take-home pay each month, the stock market has no impact.

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