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, instead of $600.
Most of the bluster neither significantly 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, longer term view and the moderate for stocks will be positive, Essaye included.
Apple led the Dow higher, rising 2.5 %. Tech and 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 quiet holiday week wherein the major averages had been flat. The S&P 500 fell 0.2 % last week as several investors got 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 season, 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 season as investors favored high growth technology labels while in the continuing Covid 19 pandemic.
Dr. Anthony Fauci warned on Sunday that the nation could see a surge in new Covid 19 infections following Christmas along with New Year’s celebrations. Two vaccines by Pfizer and Moderna have started the distribution process this month. So far over one million people in the U.S. have been vaccinated.