We monitor the backdrop for investing in risk assets across three primary pillars: economic conditions, asset prices, and technical considerations such as investor sentiment. On balance, we still believe that conditions are favorable for accepting investment risk, but above average asset class valuations and the potential for above-trend inflation should give pause.

US stock market indices, such as the S&P 500, touched new all-time highs in April as economic, household, and business data all continued to imply that the recovery from the COVID-19 economic recession remains on track and stable. As of this writing, nearly 45% of US adults have received at least one vaccine dose, and the rollout of the vaccine campaign in the US has led to a stark divergence in the performance of various equity sectors and industries since late 2020.