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, rather than $600.
All of the bluster neither considerably changed to perspective 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 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 as well as materials had been the best performing sectors in the S&P 500, gaining 0.9 % and 0.8 %, respectively.
Wall Street is coming off a peaceful holiday week where the main averages were 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 very same period.
Profit-taking could ramp up in the last week of the year, that has thus far seen surprisingly good 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 labels during 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 and New Year’s celebrations. Two vaccines by Pfizer and Moderna have begun the distribution process this month. So far more than one million people in the U.S. have been vaccinated.