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 direct payments to Americans, rather than $600.
All the bluster neither drastically 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 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, longer-term outlook and the medium for stocks will be good, Essaye included.
Apple led the Dow higher, rising 2.5 %. Tech and components 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 peaceful holiday week wherein the main averages had been flat. 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 could ramp up in the last week of the season, which has so far seen surprisingly strong returns. The S&P 500 has gained 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 while in the continuing 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. Two vaccines by Moderna and Pfizer have begun the distribution process this month. And so far over one million men and women in the U.S. have been vaccinated.