Certain environments should be treated as inline unless they are surrounded by blank lines:
% pandoc -t latex --wrap=preserve
Lorem ipsum dolor sit amet,
\begin{equation}
E = mc^2,
\end{equation}
consectetur adipiscing elit.
^D
Lorem ipsum dolor sit amet,
\begin{equation}
E = mc^2,
\end{equation}
consectetur adipiscing elit.
% pandoc -t latex --wrap=preserve
Lorem ipsum dolor sit amet,
\begin{equation}
E = mc^2,
\end{equation}
consectetur adipiscing elit.
^D
Lorem ipsum dolor sit amet,
\begin{equation}
E = mc^2,
\end{equation}
consectetur adipiscing elit.
% pandoc -t latex --wrap=preserve
The formula
\begin{math}
x = y
\end{math}
should be inline.
^D
The formula
\begin{math}
x = y
\end{math}
should be inline.