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 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 5 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 medium and longer term outlook for stocks will be positive, Essaye added.
Apple led the Dow higher, rising 2.5 %. Tech & materials were the best performing sectors in the S&P 500, gaining 0.9 % and 0.8 %, respectively.
Wall Street is coming off a peaceful holiday week where the main averages were flat. The S&P 500 fell 0.2 % last week as several investors got the chips off into the year-end. The 30-stock Dow eked out a 0.1 % gain for the same period.
Profit-taking might possibly ramp up in the very last week of the season, that has so far seen astonishingly strong 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 names during the continuing Covid 19 pandemic.
Dr. Anthony Fauci warned on Sunday that the country can 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 much over one million folks in the U.S. have been vaccinated.