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.
Most of the bluster neither significantly changed to perspective 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 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, longer term outlook and the moderate for stocks will be positive, Essaye included.
Apple led the Dow higher, rising 2.5 %. Tech as well as materials were the best-performing sectors in the S&P 500, gaining 0.9 % and 0.8 %, respectively.
Wall Street is actually coming off a quiet holiday week where the major averages had been 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 very same period.
Profit-taking might possibly ramp up in the last week of the season, that has up to this point seen surprisingly good 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 season as investors favored high growth technology names while in the ongoing Covid-19 pandemic.
Dr. Anthony Fauci warned on Sunday that the country might see a surge in new Covid 19 infections after Christmas along with New Year’s celebrations. Two vaccines by Moderna and Pfizer have begun the distribution process this month. So far over one million individuals in the U.S. are vaccinated.