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Tom Hutchinson

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From this author
Cabot Income Advisor
November 19, 2024
The market leveled off last week after the huge election surge. Stocks are trying to find a more sober post-election footing.

The S&P 500 was down very slightly last week after soaring 5% in the three days following the election. The initial reaction to the Trump victory was higher growth expectations and a surge in cyclical stocks countered by a spike in interest rates. We’ll see if those trends continue after the market fully digests the election.
November 19, 2024
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Tom Hutchinson
Stock Market
Cash In on the Trump Energy Boom
The policy proposals of the new administration are raising the prospects for a Trump energy boom, and this natural gas stock is my favorite way to play it.
November 14, 2024
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Tom Hutchinson
Cabot Income Advisor
November 12, 2024
Donald Trump was elected President last Tuesday, and the market posted the best week of the year. The S&P 500 soared about 5% in the three days following the election.

Investors perceive his election will deliver stronger economic growth, primarily through deregulation and tax cuts. Although interest rates spiked higher on the expectation of a stronger economy, the market views the revised prognosis as overwhelmingly bullish, so far.
November 12, 2024
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Tom Hutchinson
Cabot Income Advisor
November 5, 2024
It’s all about the election right now.

The massive political event is sucking all the oxygen away from everything else. It’s worth noting that the Fed will meet and likely cut the Fed Funds rate this week. That will be the focus after the election is resolved, if it’s resolved.

I don’t get into the business of predicting political outcomes. That’s not my horserace. As of now, the markets seem to be leaning toward a Trump victory. That appears to be the more likely bet. But all that stuff favored Hillary even more so in 2016. We’ll see what happens.
November 5, 2024
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Tom Hutchinson
Cabot Income Advisor
October 29, 2024
It has been a great market for most of the last two years. But the bull market chops will be severely tested over the next couple of weeks.

The S&P 500 is within a whisker of the all-time high after rallying 22% YTD and over 60% in the past two years. The recent investor perception is that the Fed has begun a rate-cutting cycle that will last for two years, and the economy is still solid. That view will be put to the test this week.
October 29, 2024
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Tom Hutchinson
Dividend Stocks
10 Benefits of Monthly Dividend REITs
If consistent cash in your pocket isn’t reason enough to own monthly dividend REITs, here are some other attractive features of this type of investment.
October 25, 2024
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Tom Hutchinson
Magazine
2 Dividend Stocks for Low Interest Rates
Dividend stocks love lower interest rates, and these two dividend payers are among the best in the market.
October 25, 2024
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Tom Hutchinson
Cabot Income Advisor
October 15, 2024
The bull market is now two years old and shows no signs of stopping.

Since the bear market low in October of 2022, the S&P 500 has risen more than 60%. It has been powered by the artificial intelligence catalyst, a surprisingly resilient economy, and the peaking of interest rates. Overall earnings are projected to be strong, and the market could get a further boost from AI-specific earnings this quarter.
October 15, 2024
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Tom Hutchinson
Cabot Income Advisor
October 8, 2024
After another up week and a record close last Friday, the market is grappling with mixed signals.

Last week’s highly anticipated jobs report came in much better than expected. The previous two weak jobs reports had roiled the market as they stoked recession fears. But not this one. The market was initially thrilled but is now thinking twice about the situation.
October 8, 2024
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Tom Hutchinson
Cabot Income Advisor
October 1, 2024
The market is wrapping up another good month and quarter. The S&P posted strong gains in September, after three straight winning weeks in a row, following a rough first week. The index is also up nicely for the third quarter and near the all-time high with a better than 20% gain year-to-date.

The latest upward leg is being driven by cooling inflation, falling interest rates, and a still-resilient economy. We’re getting the rate cuts without the economic pain and an expected soft landing. What’s not to like?
October 1, 2024
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Tom Hutchinson
Dividend Stocks
2 Dividend-Paying Stocks to Buy for a New Era
Interest rates are finally dropping and a new era has begun, and these two dividend-paying stocks are ideal for the changing times.
September 23, 2024
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Tom Hutchinson
Cabot Income Advisor
September 17, 2024
The Fed’s moment has finally arrived.

The Fed raised the Fed Funds rate at the steepest pace since the 1980s in 2022 and 2023, from 0% to 5.5% over just an 18-month span. The Fed Funds rate has remained at a multi-decade high of 5.50% for more than a year. The Fed is expected to begin cutting the rate this week and will likely continue to do so for the next two years.
September 17, 2024
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Tom Hutchinson
Cabot Income Advisor
September 10, 2024
That wasn’t a good start to September. The holiday-shortened week was the worst week for the market in two years as recession fears reemerged. Here are the results from last week.
September 10, 2024
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Tom Hutchinson
Cabot Income Advisor
September 4, 2024
Welcome to the post-Labor Day market. A sobered-up investor can be an ornery investor.

Stocks kicked off the first trading day after Labor Day on a decidedly negative note. The August manufacturing number was still somewhat weak, but all eyes are on the August jobs number that comes out Friday. It was the weak July jobs number that prompted recession fears and the market selloff in early August. Another bad number could reignite recession worries that had faded in the second part of August.
September 4, 2024
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Tom Hutchinson
Cabot Income Advisor
August 20, 2024
What recession? After a terrible start to August, the market has completely turned around. The S&P 500 has moved 7.5% higher since August 5 and is again near the high.

The recession fears that contributed to the worst day for the market in over a year were overblown. And numbers have come out since that indicate a recession is unlikely any time soon. But the Fed is still expected to start slashing rates next month. It looks like we will still get the rate cuts without a recession. The market loves it.
August 20, 2024
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Tom Hutchinson
Cabot Income Advisor
August 13, 2024
Isn’t this fun? The market gave us whiplash last week. The crash last Monday was the worst day for the market in years. It seemed like the sky was falling. But investors sobered up and the market closed flat for the week.

The tumult of last week was just a noisy road to nowhere. But the market also again showed great vulnerability to negative headlines. And while all that recession talk last week seems to have been clearly overblown, a recession is on the radar now. The market is resilient as usual. But don’t get too comfortable.
August 13, 2024
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Tom Hutchinson
Cabot Income Advisor
August 6, 2024
A week ago, the main issue with the market seemed to be earnings and if the reports would save or doom the rally. But we have since been completely blindsided by fears of recession.


While earnings have so far not been impressive, the main event has suddenly become recession. Last week, the most recent jobs report was far worse than expected. There were numbers within that report that have reliably portended every recession since the 1970s. As a result, the stock market plunged, and interest rates crashed. The benchmark 10-year Treasury rate moved below 4% and Wall Street has assigned a 95% chance of the Fed cutting the Fed Funds rate by 50 basis points in September.
August 6, 2024
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Tom Hutchinson
Cabot Income Advisor
July 30, 2024
The market seems to have regained its footing since the selloff last week. It’s still flat for the month of July, but it isn’t down, which is encouraging.

Technology hit a snag with bad news from China. We’ll see if earnings can overcome that weakness as the AI catalyst comes front and center again. But the bigger story in July was the broadening rally. An improving interest rate prognosis prompted a strong rally in the previously beleaguered interest rate-sensitive stocks in REITs and utilities.
July 30, 2024
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Tom Hutchinson
Magazine
2 Defensive Stocks for a Possible Pullback
It’s too early to tell whether the market rally is broadening out or petering out, but solid defensive names are likely to benefit in either case. Here are two I like right now.
July 26, 2024
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Tom Hutchinson
Dividend Stocks
BIPC & AMT: 2 Cheap Defensive Stocks for a Changing Market
Cheap defensive stocks are poised to outperform if we see sustained market rotation, and BIPC and AMT are two good-looking choices.
July 26, 2024
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Tom Hutchinson
Cabot Income Advisor
July 16, 2024
Wow. Just wow. Not only has this market rally continued to forge on, it’s broadened out too. After a 14.5% gain in the first half of this year, the S&P is putting together an impressive July with a better than 3% gain so far.

The latest leg of this rally has been sparked by a better-than-expected June CPI report. Interest rate optimism abounds. Consensus now expects a Fed rate cut before the end of the year and an increased expectation that overall interest rates have peaked and are likely to trend lower for the rest of the year.
July 16, 2024
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Tom Hutchinson
Cabot Income Advisor
July 9, 2024
This market rally keeps forging on no matter what. Technology cooled off but, no problem, other sectors are picking up the slack.

Interest rates have likely peaked. The chances of a Fed rate cut before the end of the year have increased. And the economy is still solid. Sectors rotate, headlines come and go, but as long as the main ingredients of future lower rates and a still-decent economy prevail, the market should be good.
July 9, 2024
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Tom Hutchinson
Cabot Income Advisor
July 2, 2024
The market continues to hover near the all-time high. The S&P 500 finished the first half of the year up 14.5%. That’s a not-too-shabby 29% annual pace.

As I mentioned earlier, I believe it is unlikely that the S&P will finish the year up 29%. That means market returns must at least flatten out somewhat going forward. It’s also true that the technology rally has petered out in the last few weeks.
July 2, 2024
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Tom Hutchinson
Cabot Income Advisor
June 18, 2024
Just when it looked like the rally was petering out, the market is having a great June so far. The S&P is up about 5% in June after making four consecutive record closes last week. The index is now up 14% so far this year, and it’s not even half over.
June 18, 2024
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Tom Hutchinson
Cabot Income Advisor
June 11, 2024
It’s a new high! April was down. May was up. And June has been an up month so far. Hopefully, June will follow through and be another good month, but I’m still expecting a flatter market for a while.

The market goes back and forth with the interest rate narrative. But I don’t expect a resolution on that issue any time soon, or at least for the rest of the summer. Either the economy has to slow, or the Fed is going to at least leave rates where they are. But investors still insist on expecting rate cuts before the end of the year even though the economy looks strong.
June 10, 2024
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Tom Hutchinson
Cabot Income Advisor
June 4, 2024
The market has leveled off since the middle of May. I expect more of the same going forward.

The S&P 500 pulled back in early April after a five-month rally as sticky inflation soured the interest rate narrative. The index then recovered to new highs in the middle of May on an improved interest rate outlook. But stocks have since leveled off as the interest rate outlook got stuck in the mud.
June 4, 2024
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Tom Hutchinson
Cabot Income Advisor
May 21, 2024
The market dodged a bullet. And the rally forges on.

After a 5% dip from the high, stocks started climbing again in mid-April and have regained all the losses. Last week’s inflation report had the potential to derail the recent rally. But it didn’t. And the good times are continuing.
May 20, 2024
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Tom Hutchinson
Cabot Income Advisor
May 14, 2024
The market has regained its footing. After a 5% pullback in the earlier part of April, the S&P 500 has since regained nearly all that was lost, and the index is within bad breath distance of the high.

Earnings have been good. With 92% of S&P 500 companies having reported, earnings increased an average of 5.4% over last year’s quarter. But it’s better than that. If you take out the report of Bristol-Myers Squibb (BMY), average earnings growth would be 8.3% for all the other stocks on the index. That’s a healthy gain.
May 14, 2024
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Tom Hutchinson
Cabot Income Advisor
May 7, 2024
The market has shown some renewed strength over the past several days, particularly among interest rate-sensitive stocks. The Fed met last week, and the market dug this month’s vague insinuations.

The rally sputtered in April after sticky inflation soured the falling interest rate narrative. But last week the Fed Chairman indicated that the next Fed Funds rate move would most likely be a cut and not a raise. Although a hike wasn’t expected, investors like hearing the Fed say it. The statement also combines with recent news of weaker economic growth and a slowing job market.
May 7, 2024
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Tom Hutchinson
Cabot Income Advisor
April 30, 2024
The market is in a tug-o-war between the bummer that rates are likely to stay higher for longer and excitement about the earnings season and artificial intelligence.

The launch of this earnings season has so far saved the market from a selloff that began at the beginning of April when the interest rate prognosis soured. Sticky inflation and a Fed that appeared to lose its resolve to cut rates this year spoiled a five-month rally. But earnings are reviving the market.
April 30, 2024
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Tom Hutchinson