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 immediate payments to Americans, instead of $600.
All of the bluster neither drastically changed to perspective for stocks, as markets still expected (and ultimately 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 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 quiet holiday week where the major averages were flat. The S&P 500 fell 0.2 % last week as several investors procured the chips off to the year end. The 30-stock Dow eked out a 0.1 % gain for the same period.
Profit-taking might possibly ramp up in the last week of the season, that has thus far seen surprisingly strong returns. The S&P 500 has gotten 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 names during the continued Covid-19 pandemic.
Dr. Anthony Fauci warned on Sunday that the nation might see a surge in new Covid 19 infections after Christmas along with New Year’s celebrations. Two vaccines by Pfizer and Moderna have started the distribution process this month. And so far more than one million people in the U.S. have been vaccinated.