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, instead of $600.
All of the bluster neither considerably changed to outlook for stocks, as markets still expected (and eventually 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 largely in place, and until that changes, the medium and longer-term outlook for stocks will be positive, Essaye included.
Apple led the Dow higher, rising 2.5 %. Tech & supplies were the best performing sectors in the S&P 500, gaining 0.9 % and 0.8 %, respectively.
Wall Street is coming off a peaceful holiday week where the main averages had been level. The S&P 500 fell 0.2 % last week as some investors got the chips off to the year end. The 30 stock Dow eked out a 0.1 % gain for the same period.
Profit-taking could ramp up in the very last week of the year, that has so far seen amazingly good returns. The S&P 500 has gained 15.4 % year to date, although 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 country may see a surge in new Covid 19 infections after Christmas and New Year’s celebrations. 2 vaccines by Moderna and Pfizer have started the distribution process this month. So far more than one million individuals in the U.S. are vaccinated.