• Inflation is a key concern for many of you. Brad reminded us that inflation figures are comparative, showing year-by-year changes. As the year continues, inflation numbers will seem especially high because they will be compared to last year’s period of lower demand. Looking at other periods for comparison, such as 2 years ago, show inflation moving at a reasonable rate.

• There is real inflation, but it may not be a long-term trend. A lot of price increases are simple matters of supply and demand. Producers reduced output during the recession and have not been able to increase supply to meet demand. As long as demand remains strong, there is every incentive for producers to make more which may lead inflation to fall back to the levels that have been more common during the past 20 years.

• Inflation often results from increased economic activity. This usually has a strong correlation to a rising market. With company earnings expected to remain strong (see Brad’s slides on earnings), we can expect the market to sustain current high valuations.

• The residential real estate market has some real strength behind it. Since the financial crisis, there has been underinvestment in housing. When you combine that with the large millennial generation entering a period of child-rearing and higher incomes, demand may remain strong for some time.

• By Brad’s estimation, the battle against COVID is showing tremendous progress. The deployment of vaccines and ability of domestic resources to cope with ongoing illness will be supportive of continued economic reopening and recovery. Continuing vaccinations will help with this.

• For an additional recap of what went down in the market during April, check out the monthly update.