Biden signed the bipartisan package of spending legislation passed by Congress over the weekend, preventing a government shut down and funding federal operations until mid-March.
It is a measure requested by the President-elect Trump. The reduced bill from around 1,500 to 100 pages does not increase the debt ceiling. A bipartisan provision in the original legislation that would have given members of Congress an increase of 3.8% is also gone.
Even though the deal was made at 11th hour, it did not calm down markets that have had a difficult time maintaining their recent momentum following elections. The S&P 500 is down 1.7% since the start of December. Nasdaq, which is dominated by tech, has done better. It gained 1.4% for the month, although it lost nearly 3% in one week.
Tom Essaye of Sevens Report Research attributes the drop to Fed’s hawkish remarks, political turmoil, and last week’s disappointing data for initial unemployment claims. “potential preview” New Year’s resolutions
“Now, to be clear, while I say that, I’m also not saying I expect the market to decline next year,” Essaye added.
“Instead, I think last week was a preview of 2025 because it was a realization of what I have been warning about: Namely that uncertainty around the key drivers of this bull market is going to rise and we saw that last week with two of the drivers of rally, expectations for Fed rate cuts and pro-growth policies.”
The S&P 500 and Nasdaq Composite were trading fairly flat midway through Monday’s session, up 0.6% and 1%, respectively, as of 2:15 pm ET. This week, with limited trading days, market movements are likely to be soft.
The bitcoin price has likewise stagnated. Bitcoin, the largest digital currency, is now down 13% since its high point of over $108,000.
In the past, cryptocurrency has delivered mixed results in the last days of the calendar year. In order to accurately predict the outcome of this week’s events, analysts suggest keeping an eye out for macroeconomic conditions.
“While reduced liquidity can heighten volatility, the absence of major institutional activity may actually stabilize prices,” James Toledano is the chief operating officer of Unity Wallet. “This year, much depends on investor sentiment following 2024’s ETF approval and the Trump-factor as well as other macro trends.”
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