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 would veto the legislation, demanding $2,000 direct payments to Americans, rather than $600.
All the bluster neither drastically changed to perspective for stocks, as markets still expected (and eventually received) stimulus of a minimum of $900 billion to pass, wrote Tom Essaye, founder of The Sevens Report.
The five pillars of the rally (Federal stimulus, FOMC stimulus, vaccine rollout, divided government and no double dip recession) re main largely in place, and until that changes, the medium and longer term outlook for stocks will be good, Essaye included.
Apple led the Dow higher, rising 2.5 %. Tech & supplies were the best performing sectors in the S&P 500, gaining 0.9 % along with 0.8 %, respectively.
Wall Street is actually coming off a peaceful holiday week wherein the key averages had been level. The S&P 500 fell 0.2 % last week as several investors took the chips off into the year end. The 30 stock Dow eked out a 0.1 % gain for the same period.
Profit-taking might ramp up in the final week of the season, that has up to this point seen surprisingly strong returns. The S&P 500 has gotten 15.4 % year to date, even though the Dow has climbed 6.4 %. The Nasdaq has soared 43.2 % this season as investors favored high-growth technology names while in the ongoing Covid-19 pandemic.
Dr. Anthony Fauci warned on Sunday that the nation could see a surge in new Covid-19 infections after Christmas along with New Year’s celebrations. 2 vaccines by Pfizer and Moderna have started the distribution process this month. And so far over one million men and women in the U.S. are vaccinated.