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 immediate payments to Americans, rather than $600.
All of the bluster neither substantially changed to outlook for stocks, as markets still expected (and ultimately received) stimulus of a minimum of $900 billion to pass, wrote Tom Essaye, founding father 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 mainly in place, and until that changes, the moderate and longer-term outlook for stocks will be positive, Essaye included.
Apple led the Dow higher, rising 2.5 %. Tech and materials were the best-performing sectors in the S&P 500, gaining 0.9 % as well as 0.8 %, respectively.
Wall Street is coming off a quiet holiday week in which the main averages were level. The S&P 500 fell 0.2 % last week as some investors took the chips off to 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, which has up to this point seen surprisingly good returns. The S&P 500 has acquired 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 continued Covid 19 pandemic.
Dr. Anthony Fauci warned on Sunday that the nation might see a surge in new Covid 19 infections after Christmas and New Year’s celebrations. Two vaccines by Pfizer and Moderna have started the distribution process this month. So far more than one million folks in the U.S. are vaccinated.