After President Trump signed the Covid-19 aid bill he criticized last week, the US stock market rose on Monday. This eliminates the uncertainty regarding the launch of the relief expenditure plan.
Futures linked to the S&P 500 index rose 0.8%, indicating that the benchmark index will rise after the opening of New York. The market closed last week down nearly 0.2%. Contracts related to the technology-focused Nasdaq-100 index rose 0.7%.
The $900 billion bill signed by Mr. Trump paved the way for the government to pay directly to American households, as the rising coronavirus pandemic continues to disrupt business and social activities. Investors expect that the additional spending will help cushion the economy as state and local authorities restrict the spread of the Covid-1
“Overnight, we completely got rid of the stimulus package. Economically speaking, this is the main support to build a bridge between this difficult winter.” PineBridge Investments’ multi-asset portfolio manager Hani Redha said. “The market will still maintain a constructive atmosphere.”
This week’s transactions may remain light, with many people taking vacations during the year-end holidays. Lower trading volume may cause major changes in the market.
In the bond market, the yield on the 10-year US Treasury bond rose to 0.956% from 0.933% on Thursday at the end of Christmas holiday trading. Yields rise when prices fall.
Overseas, the pan-European Stoxx Europe 600 rose 0.7%. On Boxing Day, the British market is closed.
After the EU started distributing the Covid-19 vaccine on Sunday, sentiment in the region increased. Just a few days ago, the European Union and the United Kingdom reached a post-Brexit trade agreement, which ended the years of uncertainty in the future relationship between the two sides.
Mr. Redha said: “Every day goes by, we eliminate uncertainty more than add uncertainty.”
Asian trading closed mixed. China’s Shanghai Composite Index was basically flat, while Japan’s Nikkei 225 Index rose 0.7%. Hong Kong’s Hang Seng Index fell slightly by 0.3%.
On Monday, Alibaba Group’s Hong Kong-listed shares fell 8%. The Central Bank of China issued a harshly worded statement on Sunday, criticizing Ant’s business practices and instructing the financial technology giant to shift its focus to its digital payment business.
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