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.
Most of the bluster neither significantly changed to perspective for stocks, as markets still expected (and eventually received) stimulus of a minimum of $900 billion to pass, wrote Tom Essaye, founder 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 perspective and the moderate for stocks will be good, Essaye included.
Apple led the Dow higher, rising 2.5 %. Tech and supplies had been the best performing sectors in the S&P 500, gaining 0.9 % and 0.8 %, respectively.
Wall Street is actually coming off a peaceful holiday week in which the key averages had been 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 could ramp up in the final week of the season, that has so far seen surprisingly strong returns. The S&P 500 has acquired 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 labels while in the ongoing Covid-19 pandemic.
Dr. Anthony Fauci warned on Sunday that the country could see a surge in new Covid 19 infections after 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 folks in the U.S. are vaccinated.