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 immediate payments to Americans, instead of $600.
All 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 mainly in place, and until that changes, the moderate and longer term perspective for stocks will be good, Essaye added.
Apple led the Dow higher, rising 2.5 %. Tech as well as materials were the best performing sectors in the S&P 500, gaining 0.9 % along with 0.8 %, respectively.
Wall Street is coming off a peaceful holiday week where the key averages were flat. The S&P 500 fell 0.2 % last week as some 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 could ramp up in the final week of the year, which has so far seen astonishingly strong returns. The S&P 500 has gained 15.4 % year to date, even though the Dow has climbed 6.4 %. The Nasdaq has soared 43.2 % this season as investors favored high-growth technology labels during the continued Covid 19 pandemic.
Dr. Anthony Fauci warned on Sunday that the nation can see a surge in new Covid 19 infections after Christmas and New Year’s celebrations. 2 vaccines by Moderna and Pfizer have begun the distribution process this month. So far over one million individuals in the U.S. are vaccinated.