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 would veto the legislation, demanding $2,000 direct payments to Americans, instead of $600.
All the bluster neither significantly changed to outlook 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 mainly in place, and until that changes, the medium and longer-term perspective for stocks will be good, Essaye included.
Apple led the Dow higher, rising 2.5 %. Tech & supplies had been the best-performing sectors in the S&P 500, gaining 0.9 % along with 0.8 %, respectively.
Wall Street is coming off a quiet holiday week where the major averages were level. The S&P 500 fell 0.2 % last week as several investors took the chips off to the year-end. The 30 stock Dow eked out a 0.1 % gain for the same period.
Profit-taking might ramp up in the last week of the year, which has thus far seen surprisingly strong returns. The S&P 500 has gotten 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 labels while in the continuing Covid 19 pandemic.
Dr. Anthony Fauci warned on Sunday that the country may 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. And so far over one million men and women in the U.S. have been vaccinated.