President Donald Trump signed a $900 billion Covid 19 relief bill into law, averting a government shutdown and extending unemployment benefits to millions of Americans. The signing came days after Trump suggested he will veto the legislation, demanding $2,000 immediate payments to Americans, instead of $600.
All the bluster neither considerably changed to perspective for stocks, as markets still expected (and ultimately received) stimulus of a minimum of $900 billion to pass, wrote Tom Essaye, founding father of The Sevens Report.
The 5 pillars of the rally (Federal stimulus, FOMC stimulus, vaccine rollout, divided government and no double dip-recession) re main mainly in place, and until that changes, longer term perspective and the medium for stocks will be positive, Essaye included.
Apple led the Dow higher, rising 2.5 %. Tech and supplies were the best performing sectors in the S&P 500, gaining 0.9 % as well as 0.8 %, respectively.
Wall Street is actually coming off a quiet holiday week in which the key averages had been level. The S&P 500 fell 0.2 % last week as several investors procured the chips off into the year-end. The 30-stock Dow eked out a 0.1 % gain for the same period.
Profit-taking could ramp up in the last week of the season, that has thus far seen amazingly strong returns. The S&P 500 has gotten 15.4 % year to date, although the Dow has climbed 6.4 %. The Nasdaq has soared 43.2 % this year as investors favored high-growth technology labels while in the continued Covid 19 pandemic.
Dr. Anthony Fauci warned on Sunday that the country may see a surge in new Covid 19 infections following Christmas along with New Year’s celebrations. Two vaccines by Moderna and Pfizer have begun the distribution process this month. So far over one million men and women in the U.S. have been vaccinated.