O Dow Jones Industrial Average (DJINDICES: ^ DJI) it rose on Monday after news over the weekend that President Donald Trump signed a government spending stimulus and bill that has been in limbo since it was passed by Congress last week. The Dow rose about 0.8% at 11:50 am EST.
Mega retailer Walmart (NYSE: WMT) it will certainly benefit from the stimulus package, as its low-income and unemployed customers receive a financial boost, although the shares lagged behind the market on Monday. Winning the market with ease was Apple (NASDAQ: AAPL) inventory despite an analyst alert related to the company’s reported autonomous car project.
Image source: Getty Images.
Trump signs stimulus bill
After signaling his disapproval of a pandemic and government spending relief bill, President Trump finally signed the bill on Sunday. The project includes an estimated $ 900 billion to support Americans as the pandemic intensifies, ahead of the expected wide availability of vaccines early next year.
The account includes $ 600 stimulus checks for adults and children, subject to income limits. This is less than the $ 1,200 stimulus checks sent to adults as part of the CARES Act in March. Supplemental federal unemployment benefits will also be extended until March 14 for $ 300 a week, providing extra help for those who lost their jobs due to the pandemic.
The new stimulus project is good news for retailers like Walmart, which benefited from the first round of stimuli earlier this year. Walmart recorded impressive sales growth during the pandemic, mainly in the growth of e-commerce. But comparable sales generally declined in the third quarter, as the benefits of the stimulus declined.
The company recorded comparable growth of 6.4% in sales in the United States in the third quarter, down from 9.3% growth in the second quarter. Almost all of this growth was driven by e-commerce, and the total number of transactions fell by more than 14%. Walmart serves low-income customers hardest hit by the pandemic, so an additional stimulus should help boost sales of essential products in the coming months.
Walmart’s shares did not rise much on Monday, up about 0.3% late in the morning. Shares have risen 21% this year, as the company’s investments in e-commerce and online grocery have been rewarded amid the pandemic.
Analyst questions Apple car plans
Rumors that the tech giant Apple was working on an autonomous car surfaced last week. This news raised stocks, but TFI analyst Ming-Chi Kuo believes the market may be moving ahead.
Kuo expects Apple to be at a major disadvantage for companies that already accumulate data to train their autonomous systems. Kuo does not see Apple launch a car until 2025, with a possible launch in 2028 or later, according to the analyst. Until then, Apple will be terribly behind in terms of the data needed for the AI systems involved in an autonomous car.
Kuo is concerned that Apple will not be able to bridge this data gap, thereby giving up the market to competitors. Of course, Apple could buy data or acquire companies that are collecting data. Apple certainly has the resources to make a major acquisition, if necessary.
There are still many outstanding questions about Apple’s car plans. The company is unlikely to manufacture the car on its own, so presumably it would need to partner with a manufacturer to make an Apple car a reality. And it remains to be seen whether the ecosystem that Apple has built around its devices offers any kind of advantage in the automotive market.
Apple shares were up about 2.3% late Monday morning, with the stock market rising. The shares gained about 84% this year. This pandemic rally pushed Apple’s price / earnings ratio above 40, a historically high level for the company and difficult to justify given the tech giant’s size and growth prospects. 2021 may not be so good for Apple investors, given the stock price at the time.