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President Donald Trump signed executive orders that focus on extending relief from the coronavirus pandemic. As a result, the Dow rallied 250 points higher while the S&P 500 rose 0.2%, an all-time high for S&P 500.
Some of the Dow’s best-performing companies are Boeing and Nike, with 2.6% and 3.9% rise, respectively. Meanwhile, stocks of Alphabet, Amazon, Facebook, and Microsoft struggled. Experts also revealed that bank stocks might have also influenced these gains. This Monday, JPMorgan Chase has also improved its shares with Bank of America, Citigroup, and Wells Fargo.
President Trump ordered the following for coronavirus relief: the continuation of expanded unemployment benefits, postponement of student loan repayments throughout 2020, payroll tax holidays, and extended federal protections on evictions. But instead of receiving $600 a week as unemployment benefits, pandemic-affected beneficiaries will get only $400 a week.
This move by Trump was a result of a congress failing to decide on a new Covid-19 stimulus package the previous week. Some of the benefits from an earlier package that were approved in early 2020 and lapsed in the final weeks of July led to the US economy’s uncertainty.
Meanwhile, Nasdaq strained and dropped to 0.4% while traders considered top tech company stocks. Amazon stocks struggled at 0.6%; while Alphabet also dipped at 0.1% as Microsoft fell at 1.99%. The top online streaming site Netflix also suffered the same fate as their stocks slid at 2% each.
Stone Investment chief Bill Stone said that this sudden move by the president might lead to possible legal problems and political concerns as it pressures Congress to consider a deal. These orders need federal funding as to which Congress has full control of. After Trump signed the bill, Democrats expressed that they would not support it if the $600 per week unemployment benefit is not extended.
Republicans and Democrats can’t agree on how much the next round of unemployment relief would cost the past week. It also led to the White House rejecting a proposal amounting to $2 trillion coming from Democrats.
Some experts are on a positive note like Jefferies head financial adviser Aneta Markowska. She is confident that another fiscal support comes September will keep the momentum. She said other positive events would eventually follow like some states reopening schools, back-to-school buying, and parents returning to work. Markowska stated that all these factors will subsequently conjugate and help power up a reopening.