US Stock Market Overview – Santa Claus Rally Starts with Record Highs

US stocks closed at all-time highs on Monday, following the long holiday weekend. This followed news that President Trump signed the $900 billion stimulus bill that now paves the way for the government to make direct payments to American households. Laster in the day the House of Representatives voted to increase the second round of direct payments to $2,000 as opposed to $600. All three major average closed at record highs. The Russell 2000 declined. Most sectors in the S&P 500 index were higher led by gain in the Communications sector. The Energy sector bucked the trend. Stocks generally rise during the period between Christmas and New Year’s. This is known as the Santa Claus rally. Historically, January is a positive month for stocks. Over the past 10-years the S&P 500 index has increased 60% of the time for an average gain of 1.2%. The dollar edged higher on Monday and gold prices were nearly unchanged.

The House voted to increase the second round of federal direct payments to $2,000 as Democrats embrace President Donald Trump’s calls to put more money in Americans’ pockets.The measure would boost the stimulus checks in the year-end coronavirus relief and government funding package to $2,000 from $600.

The House Overrides Defense Veto

The House voted to override President Donald Trump’s veto of an annual defense spending bill, placing the final steps of defying the Republican president in the hands of the GOP-led Senate. The Senate will vote on Tuesday. The bill, known as the 2021 National Defense Authorization Act, passed the House on December 8, with the support of more than three-fourths of the chamber.