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 will veto the legislation, demanding $2,000 immediate payments to Americans, instead of $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 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 positive, Essaye added.
Apple led the Dow higher, rising 2.5 %. Tech & materials 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 peaceful holiday week in which the key averages had been level. The S&P 500 fell 0.2 % last week as some investors got 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 last week of the season, which has thus far seen amazingly good returns. The S&P 500 has gained 15.4 % year to date, while the Dow has climbed 6.4 %. The Nasdaq has soared 43.2 % this year as investors favored high-growth technology labels during the continued Covid 19 pandemic.
Dr. Anthony Fauci warned on Sunday that the country could see a surge in new Covid-19 infections after Christmas along with New Year’s celebrations. 2 vaccines by Moderna and Pfizer have started the distribution process this month. And so far more than one million men and women in the U.S. have been vaccinated.