U.S. stocks continued and accelerated their rise in the 2nd quarter of 2021 gaining over 8%. Winslow stocks are well ahead of the 15% year-to-date return of the broad market averages.
As current quarterly earnings announcements unfold, we anticipate substantial positive earnings surprises based on volume gains and margin expansion. Indeed, corporate earnings are likely to be up over 60% on a year-to-year basis (reflecting the post pandemic recovery). As we mentioned in our last client letter we have concerns of inflation accelerating too fast. However, moderate inflation increases are not an impediment to the stock market as many of our companies have the ability to pass along price increases. In addition, we have in recent months added to materials, real estate and other sectors that stand to benefit.
We have waited a long time to add bonds to our balanced accounts; in the next few months, we expect to have that opportunity.
