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 direct payments to Americans, instead of $600.
All the bluster neither drastically 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 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, longer-term outlook and the moderate for stocks will be positive, Essaye included.
Apple led the Dow higher, rising 2.5 %. Tech and components had been the best performing sectors in the S&P 500, gaining 0.9 % and 0.8 %, respectively.
Wall Street is actually coming off a peaceful holiday week in which the main averages were level. 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 might ramp up in the last week of the season, which has up to this point seen surprisingly good returns. The S&P 500 has gotten 15.4 % year to date, while the Dow has climbed 6.4 %. The Nasdaq has soared 43.2 % this year as investors favored high growth technology names during the ongoing Covid 19 pandemic.
Dr. Anthony Fauci warned on Sunday that the nation can see a surge in new Covid-19 infections following Christmas along with New Year’s celebrations. 2 vaccines by Pfizer and Moderna have started the distribution process this month. So much more than one million people in the U.S. are vaccinated.