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 of 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, founder 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 largely 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 & components were the best-performing sectors in the S&P 500, gaining 0.9 % along with 0.8 %, respectively.
Wall Street is actually coming off a quiet holiday week where the major averages were flat. The S&P 500 fell 0.2 % last week as several 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 so far seen astonishingly strong returns. The S&P 500 has gotten 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 may see a surge in new Covid 19 infections after Christmas along with New Year’s celebrations. Two vaccines by Pfizer and Moderna have begun the distribution process this month. So much over one million individuals in the U.S. have been vaccinated.