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 immediate payments to Americans, instead of $600.
All of 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 perspective for stocks will be positive, Essaye included.
Apple led the Dow higher, rising 2.5 %. Tech as well as components had been the best-performing sectors in the S&P 500, gaining 0.9 % as well as 0.8 %, respectively.
Wall Street is actually coming off a peaceful holiday week in which the key averages were level. The S&P 500 fell 0.2 % last week as some investors took 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 up to this point seen surprisingly good returns. The S&P 500 has acquired 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 during the ongoing Covid 19 pandemic.
Dr. Anthony Fauci warned on Sunday that the country may see a surge in new Covid 19 infections following Christmas along with New Year’s celebrations. 2 vaccines by Moderna and Pfizer have started the distribution process this month. And so much more than one million people in the U.S. have been vaccinated.