From a medical perspective, is the pandemic over? The answer is simple: I don’t know. The same is true if we look at it on a global basis: I don’t know. But when we look at the U.S. and when we consider the economic—rather than the medical—effects, then I think the answer is pretty clearly yes. We are now in the post-pandemic era.

As we discussed yesterday, the current inflation data simply is not that scary. Yes, there are signs of inflation, and the most recent numbers were startling. But when you break down those numbers, take out the pandemic effects, and normalize over a longer time period, inflation is pretty much where it was in 2018 and 2019.

Today’s post was cowritten by Peter Essele, vice president of investment management and research.

I was going to write a piece on inflation today, but I got sidetracked. Sorry about that, and I promise to post on that topic tomorrow. Today, I am spending some time on getting back to work—in the office.

Given how much things have improved, I’ll be taking this video to a monthly schedule, on the second Friday of the month—I’ll see you then.

My colleague Sam Millette, senior investment research analyst on Commonwealth’s Investment Management and Research team, has helped me put together this month’s Market Risk Update. Thanks for the assist, Sam!

Equity markets continued to rally in April, with all three major U.S. indices setting new all-time highs during the month. The Dow Jones Industrial Average gained 2.78 percent in April, while the S&P 500 saw a 5.34 percent increase. The Nasdaq Composite led the way with a 5.43 percent gain. Markets were supported by improvements on the public health front and falling long-term interest rates. The 10-year Treasury yield declined in April, breaking a three-month streak of rising long-term rates.

My colleague Sam Millette, senior investment research analyst on Commonwealth’s Investment Management and Research team, has helped me put together this month’s Economic Risk Factor Update. Thanks for the assist, Sam!

The economic recovery continued in April, driven by improvements on the public health front and the lingering tailwind from the most recent federal stimulus bill. Consumer confidence surged during the month, highlighting increased optimism from consumers for a return to more normal economic conditions throughout the year. Service sector confidence fell slightly in April but remains near record territory. The weakest data point was employment, with April’s employment report showing a significant drop in job growth. Although it marked four consecutive months with job growth, the drop called into question how sustainable recent job growth might be.

One of the big surprises over the past couple of weeks has been the strength of corporate earnings for the first quarter. As of the end of last week, according to FactSet, seven of eight companies (about 440 companies or 88 percent) had reported. Of these 440 companies, about 385 (86 percent) beat expected earnings. These are the highest levels of beats on earnings seen since the start of records in 2008.

April was a good month. While it started with what looked like another wave of infections, by month-end, we were back at recent lows for both case growth and positive test rates. Vaccinations have now hit a substantial part of the population, and that looks to have controlled the virus. The medical risks are still real, but they are now about whether and when we hit herd immunity, rather than whether we have a fourth wave. This is significant progress and means the medical risks are low and likely to decline further over the next month.

If the month of March was a turning point (and it was), the month of April demonstrated that March was not a fluke. The data showed we have really turned the corner in many ways. In April, the fourth wave of the pandemic started—and then fizzled out, resulting in much lower infection rates to end the month. Layoffs tumbled and consumer confidence rose to pre-pandemic levels. Markets rallied to all-time highs once again. In April, things got better across the board.