Hello, this is James Mayer, branch manager from the Huffman Mayer Paolo Wealth Management Group of Wells Fargo Advisors.

Summer is definitely in the air. We hope you're able to get outside and enjoy it. Our plan is to share a few things that have happened recently, in our monthly videos.

Fears over rising inflation spooked equity markets in the second week of May. Inflation ratings started to show up in parts of the commodity markets. We continue to believe that many of the current issues between supply and demand are driven by either curtail production due to COVID restrictions, or increased demand that may be helped by stimulus money. Although it may be painful in the short-term, we still expect inflation to cool off as the economy returns to normal and the flow of stimulus payments go away.

According to FactSet, 95% of the companies in the S&P 500 having reported results for the first quarter, 86% have reported better than expected earnings. If that number holds, it will be the strongest results in 13 years. Also according to FactSet, the best sectors have been financials, information technology, and energy, with over 90% of these companies having beaten their own expectations.

As far as a market performance is concerned, the US has led the rest of the world again in 2021. So far this year, Morningstar reports small-cap US companies have generated some of the best returns, with the Russell 2000 up 14.3%, including dividends, year-to-date through May 26. The S&P 500 is up 12%, including dividends, over the same time period. Outpacing both developed international markets, up 8.3%, and emerging market equities, up only 2%. We are getting closer to having our routines back to some level of normal. We always want to talk with our clients and follow through with our review process. Please schedule a time to talk or for a Zoom meeting. As always, please stay safe, stay happy, stay healthy, and hopefully we will see you very soon.