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 will veto the legislation, demanding $2,000 direct payments to Americans, instead of $600.
All the bluster neither substantially changed to outlook for stocks, as markets still expected (and eventually 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 as well as materials 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 where the key averages were level. The S&P 500 fell 0.2 % last week as some 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 very last week of the season, which has thus far seen amazingly strong returns. The S&P 500 has acquired 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 names while in the continuing Covid 19 pandemic.
Dr. Anthony Fauci warned on Sunday that the nation may see a surge in new Covid-19 infections after Christmas and New Year’s celebrations. 2 vaccines by Pfizer and Moderna have begun the distribution process this month. And so far over one million folks in the U.S. have been vaccinated.