Given how much things have improved on the medical front, I will now be doing two pandemic updates a month. The video update will appear on the second Friday of the month, while this written update will appear on the last Friday of the month. Have a great holiday weekend!

Looking at the title, you could be forgiven for thinking I have finally reached that point in life where I start referring to things with “the”—"The Google,” for example. In fact, I am looking back to college, referencing a phenomenon known as the freshman 15: the 15 pounds you gained when you started eating at the dining hall. The pandemic has had the same effect on me, but even worse. Of course, being an overachiever, I wasn’t going to settle for just 19 pounds.

Today marks, in many ways, the birthday of my profession. On May 26, 1896, Charles Dow first published a list of 12 industrial companies, combining their prices in an index for the first public index of the stock market. Note that phrase, because a standard of measurement—an index—was the necessary first step in transforming a market of stocks (i.e., individual companies) into a stock market. Before, we had a bunch of trees, and it was hard for investors to see the forest. Dow put the forest front and center with his index.

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.

Banks have been deeply out of favor for a long time. In fact, you can see in the chart below just how poorly the S&P 500 Financials Index has performed compared with the rest of the index in this century. Bank stocks had barely started showing signs of life after a lost decade since the great financial crisis when the COVID-19 pandemic hit. The Fed quickly sprang into action and brought the federal funds rate back to the floor after barely taking it halfway up to the pre-2008 level. Economic activity shut down and millions lost their jobs. Banks paid a price yet again, as their stocks were one of the worst hit when the pandemic brought the world to a grinding halt in 2020.

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.

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.

India is in the midst of a brutal second wave of COVID-19, with the situation continuing to deteriorate by the day. While the human toll is massive, the economic impact is also not insignificant. At the start of 2021, India was expected to be one of the fastest-growing major economies in the world. Now, it is expected to succumb to a massive economic shock.