US stocks hit a new all time high on Monday, and global equity markets grew, as President Donald Trump signed a bill to inject $900bn of stimulus into the US economy.
The president had delayed in signing the bill, but finally did so on Monday, with investors expecting the measure to boost the US economy in 2021. The US economy is the world’s largest, but has naturally taken a hit in 2020, which will go down in history as the year of the pandemic. Stock markets are usually strong going into a new year, however the first quarter of new US administrations often brings with it a certain amount of market uncertainty.
On Wall Street, the S&P Index ended Monday up 09.%, which was a higher than the peak it hit in December 2019. The Nasdaq Composite rose by 0.7%.
Trump Wants to Raise Cheques from $600 to $,2000
Last week, President Trump rejected the $2.3tn legislation, a move which left many US lawmakers socked. On top of the stimulus measures, the legislation also included funding open up to the middle of September in order to avoid a shutdown that was originally scheduled to begin on Monday.
Trump initially refused to sign the bill into law despite US Treasury Secretary, Steven Mnuchin, working hard to negotiate the bill with law makers. In refusing to sign the bill, the president demanded that the stimulus cheque sent to individual American citizens should be raised from $600 to $2,000. Although has now signed the bill without this amendment having been pout i n place, the president said on Sunday night that he still plans to push for the increase.
European Stocks Also Rise
The US gains came following a significant rise in European stock markets. The DAX Index in Germany saw a significant 1.5% in gains, bypassing the high set in February, the last trading month before the Covid-19 sent global financial markets into turmoil. Elsewhere in Europe, the CAC in France rose by 1.2% the European wide Stoxx 600 advanced by 0.7%.
In the UK, the London markets were closed for a public holiday due to the 26 December, the usually holiday, falling on a Saturday. However, last week’s UK-EU Trade agreement finally getting over the line means the first quarter of 2021 looks much brighter than it could’ve been in the event of Brexit happening without a trade deal in place.
Back in the US, the Wall Street bank has now forecast the US economy to grow 5%, higher than the 3% growth that was previously expected. Goldman Sachs economists have said that despite the postponement of the bill being signed, the final stimulus measures are around $200bn larger than had been predicted. This accounts for about 4% of total US economic output.