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 immediate payments to Americans, instead of $600.
Most of the bluster neither significantly 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 largely in place, and until that changes, the moderate and longer-term outlook for stocks will be positive, Essaye added.
Apple led the Dow higher, rising 2.5 %. Tech & components were the best performing sectors in the S&P 500, gaining 0.9 % and 0.8 %, respectively.
Wall Street is coming off a quiet holiday week in which the major averages were flat. The S&P 500 fell 0.2 % last week as several investors procured the chips off to 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 year, which has up to this point seen astonishingly strong returns. The S&P 500 has gained 15.4 % year to date, while the Dow has climbed 6.4 %. The Nasdaq has soared 43.2 % this season as investors favored high-growth technology names while in the continuing Covid-19 pandemic.
Dr. Anthony Fauci warned on Sunday that the nation could see a surge in new Covid 19 infections after Christmas and New Year’s celebrations. 2 vaccines by Moderna and Pfizer have started the distribution process this month. So far over one million individuals in the U.S. are vaccinated.