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 of the bluster neither considerably changed to outlook for stocks, as markets still expected (and ultimately received) stimulus of a minimum of $900 billion to pass, wrote Tom Essaye, founder 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 view for stocks will be good, Essaye added.
Apple led the Dow higher, rising 2.5 %. Tech as well as supplies were 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 where the main averages had been level. The S&P 500 fell 0.2 % last week as some investors procured the chips off into the year end. The 30-stock Dow eked out a 0.1 % gain for the same period.
Profit-taking might ramp up in the final week of the season, which has so far seen astonishingly good returns. The S&P 500 has gained 15.4 % year to date, although the Dow has climbed 6.4 %. The Nasdaq has soared 43.2 % this year as investors favored high-growth technology labels during the ongoing Covid 19 pandemic.
Dr. Anthony Fauci warned on Sunday that the country can see a surge in new Covid-19 infections following Christmas along with New Year’s celebrations. Two vaccines by Moderna and Pfizer have begun the distribution process this month. And so much over one million individuals in the U.S. have been vaccinated.