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 will veto the legislation, demanding $2,000 direct payments to Americans, rather than $600.
All the bluster neither drastically changed to outlook 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 outlook and the medium for stocks will be good, Essaye included.
Apple led the Dow higher, rising 2.5 %. Tech & materials were the best performing sectors in the S&P 500, gaining 0.9 % and 0.8 %, respectively.
Wall Street is coming off a quiet holiday week where the major averages had been 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 very same period.
Profit-taking might ramp up in the very last week of the season, that has so far seen astonishingly good returns. The S&P 500 has gotten 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 names while in the continuing Covid-19 pandemic.
Dr. Anthony Fauci warned on Sunday that the nation may see a surge in new Covid 19 infections following Christmas and New Year’s celebrations. 2 vaccines by Moderna and Pfizer have started the distribution process this month. So far over one million men and women in the U.S. have been vaccinated.