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 direct payments to Americans, rather than $600.
All of 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, founder 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, the moderate and longer-term outlook for stocks will be good, Essaye included.
Apple led the Dow higher, rising 2.5 %. Tech and supplies had been the best-performing sectors in the S&P 500, gaining 0.9 % along with 0.8 %, respectively.
Wall Street is coming off a quiet holiday week in which the key averages were flat. The S&P 500 fell 0.2 % last week as several investors got 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 final week of the season, that has up to this point seen amazingly good 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 year as investors favored high growth technology labels during the ongoing Covid-19 pandemic.
Dr. Anthony Fauci warned on Sunday that the country may see a surge in new Covid 19 infections after Christmas along with New Year’s celebrations. Two vaccines by Pfizer and Moderna have begun the distribution process this month. And so far more than one million people in the U.S. are vaccinated.