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, rather than $600.
All the bluster neither significantly 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 medium and longer term perspective for stocks will be good, Essaye added.
Apple led the Dow higher, rising 2.5 %. Tech as well as components were the best performing sectors in the S&P 500, gaining 0.9 % as well as 0.8 %, respectively.
Wall Street is actually coming off a peaceful holiday week where the main averages had been level. The S&P 500 fell 0.2 % last week as several investors took 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, that has up to this point seen amazingly good 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 labels during the continued Covid-19 pandemic.
Dr. Anthony Fauci warned on Sunday that the nation might see a surge in new Covid 19 infections following Christmas and New Year’s celebrations. 2 vaccines by Moderna and Pfizer have started the distribution process this month. So far over one million people in the U.S. have been vaccinated.