Trump Signs CR, COVID-19 Relief Bills, Markets Soar To Record Highs

As 2020, the year from hell, grinds to a close, there was no slowing the Santa Claus rally as all of the major US indices closed at record highs, with the exception of the NYSE Composite, which fell short of the 14,516.73 close on December 17.

The indices took differing paths to greatness. The Dow and spiked early and made the high of the day mid-morning, slumping afterwards, while the S&P meandered along a high plain after a boost at the open. NASDAQ stocks were up, then down, eventually turning in strong gains.

Monday's rally was largely the result of President Trump signing the continuing resolution (CR) which congress handed him - and he objected to - over the holiday weekend. The $2.3 trillion measure included a nearly $900 billion COVID relief bill, extending added unemployment insurance, rent and mortgage deferrals, while doling out millions and billions to states, schools, airlines, and assorted government welfare queens.

The president did promise to send congress a redlined copy of the legislation, singling out various items in the CR, notably, most of the foreign aid packages congress uses for bribery and cash payoffs, and other pork-barrel handouts to various federal agencies and special interests. While President Trump will likely make political hay whenever congress decides to ignore his "rescissions" on spending, his objections have no weight of law, becoming effectively just for political purposes.

Democrats "will reject any rescissions" submitted by the president, said Appropriations Committee Chairwoman Nita Lowey, D-NY, in a statement.

Included in the COVID relief legislation are $600 checks to Americans earning less than $75,000, with similar amounts for qualifying dependents. The president and Democrats in the House lobbied for checks of $2000, but Senate and House Republicans were against the larger amount. During its Monday session, the House passed a stand-alone bill approving $2000 checks. The measure goes to the Senate, where passage is seen as slim, though still a possibility if certain Republicans shift their votes away from the usual conservative, austere bloc.

In any case, larger checks in the future seem almost a surety, and no doubt Wall Street is banking on such an outcome. More handouts and free money from the government is net positive for stocks, as it has been for years.

With full sessions Tuesday, Wednesday, and Thursday, only three days remain to square up positions in 2020. Friday is January 1, New Year's Day. All markets will be closed.

Tuesday morning futures are pointing to another higher open, so expect this rally to extend into the year's end and likely beyond when trading resumes Monday, January 4. Stocks generally have been bid up every January, and there seems to be no impediment other than possible objections or other surprises related to the electoral collage vote for president and vice president on January 6.

For now, all appears to be smooth sailing.

Happy Holidays!

At the Close, Monday, December 28, 2020:
Dow: 30,403.97, +204.10 (+0.68%)
NASDAQ: 12,899.42, +94.69 (+0.74%)
S&P 500: 3,735.36, +32.30 (+0.87%)
NYSE: 14,405.77, +23.27 (+0.16%)