by Chad Meyer, CFA

Among nature’s many virtues is the simple logic of its progression. The fervor of one season will feed, with some reliability, into the fruits of the next. At Tufton Capital you would be hard-pressed to find a voice in rave review of last winter’s interminable rain and snow. But as the warm weather finally takes hold, we cannot help but look forward to the lushness of spring. There is solace in the knowledge that all those gray, rainy yesterdays will make for green afternoons in the months to come.

Of course, while nature is permitted to repeat itself—turning bloomy, gloomy, and then bloomy again with calendar precision—we expect a bit more from the market. In the first quarter of 2019, the stock market made good on last year’s choppy finish, with the S&P 500 besting a decades’ worth of quarterly growth records in one heady 14% swoop. Not to be outdone, the NASDAQ climbed nearly 17%, bringing that index (like the S&P) well above its 52-week low and well within range of its 52-week high. Needless to say, this is all welcome news. But as investors consider their next move, the questions are inescapable. Are the good times on good footing, or should one expect the market to change with the weather?

On the bear side of the debate, number-crunchers are quick to point out that the three months following a first-quarter rally have, historically, found the market either slowing or giving up ground. More substantively, macroeconomic indicators provide an ample basis for longer-term concern. The International Monetary Fund, having applauded “synchronous global growth” just two years ago, now predicts a deceleration for over 70% of the world economy. The Federal Reserve, long considered a bastion of apolitical economic expertise, now appears poised to be dragged into the political fray in delayed punishment of its over-conservative response to the Great Recession. And it would seem, against many Americans’ dearest wishes, that the divisive electoral news machine has been dusted off and switched on.

And yet, hope springs eternal. As the Wall Street Journal reported recently, China and the U.S. may be in the home stretch of trade deal talks, prompting some commentators to speculate that one of the market’s most persistent bogeymen is on its last legs. Many analysts, perhaps syncing their projections to this prospect, expect a return to robust corporate earnings growth in the back half of the year. Nor do any storm clouds appear to hang over Silicon Valley. In just over thirteen weeks, software and chip-making firms have delivered stunning growth, with firms like Xerox and Nvidia proving that there’s more to the tech sector than just the FAANG gang.

In prior musings in this space, I’ve candidly shared my discomfort with macroeconomic forecasting. But with springtime at my window, I hope you’ll forgive me a note of optimism—if not for the market writ large, at least for your place in it. Take a peek inside this newsletter, and you’ll find the thinking of a driven, diverse and incredibly talented team of investment professionals. These are the people who have secured our clients’ trust and safeguarded their interests since day one at Tufton Capital. And they are the ones working, right this very moment, to ensure that even as the economy changes seasons, your financial future stays sunny indeed.