It was a great first quarter. The S&P closed out March up 10% YTD. The index also rallied an impressive 28% from late October through the first quarter. In the meantime, energy stocks are quietly killing it. I like The Williams Companies, Inc. (WMB), says Tom Hutchinson, editor at Cabot Dividend Investor.

Things have been good. The Fed reiterated its intention to lower the Fed Funds rate three times this year at the March meeting. Meanwhile, inflation is way down and the economy is solid. Manufacturing data was much better than expected and the Fed raised its GDP forecast for 2024 from 1.4% to 2.4%.

But the economic data may be a little too good for the market’s liking. Stocks had rallied so strongly on the notion of falling rates and a soft landing in 2024 that the strong economy is messing with the falling rates thing. The odds of a first Fed rate cut in June just fell below 50% and the benchmark 10-year Treasury rate soared to a new 2024 high.

A consolidation or pullback at this juncture wouldn’t be abnormal or unhealthy. If the market does pull back, it will likely regain traction in the months ahead. A rising rate or recession scenario likely wouldn’t be revealed until later in the year. The rally is still in place for now.

Meanwhile, energy was by far the number one performing market sector in the last week, and the second-best performing sector YTD as oil prices continue to creep ever higher.

The Williams Companies Inc. (WMB)
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After going sideways for many months, WMB has broken out since the middle of February. Energy stocks are hot and midstream companies are mostly selling near multi-year highs. WMB is a stable, high-yielding stock and the company should deliver solid and dependable earnings in just about any economy.

Business remains solid and not dependent on commodity prices. The company pays a well-supported dividend, and recent acquisitions and expansions ensure more solid growth going forward all the way out to 2028.

Recommended Action: Buy WMB.

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