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 drastically 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 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, longer term view and the moderate for stocks will be good, 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 % along with 0.8 %, respectively.
Wall Street is actually coming off a peaceful holiday week where the main averages had been level. The S&P 500 fell 0.2 % last week as several investors procured the chips off into 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 final week of the season, that has thus far seen amazingly 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 names during the continued Covid-19 pandemic.
Dr. Anthony Fauci warned on Sunday that the nation could see a surge in new Covid-19 infections after Christmas along with New Year’s celebrations. Two vaccines by Pfizer and Moderna have begun the distribution process this month. And so far over one million people in the U.S. have been vaccinated.