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 many days after Trump suggested he would veto the legislation, demanding $2,000 immediate payments to Americans, instead of $600.
All the bluster neither substantially changed to outlook 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 five 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 view and the medium for stocks will be good, Essaye added.
Apple led the Dow higher, rising 2.5 %. Tech and components 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 peaceful holiday week where the main averages were flat. The S&P 500 fell 0.2 % last week as several investors took the chips off to the year end. The 30-stock Dow eked out a 0.1 % gain for the very same period.
Profit-taking could ramp up in the final week of the season, that has so far seen astonishingly good returns. The S&P 500 has acquired 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 during the ongoing Covid-19 pandemic.
Dr. Anthony Fauci warned on Sunday that the country could see a surge in new Covid-19 infections after Christmas along with New Year’s celebrations. Two vaccines by Moderna and Pfizer have begun the distribution process this month. And so far more than one million men and women in the U.S. are vaccinated.