Fundstrat’s bullish strategist Tom Lee told investors the market will go higher as it prices in the positive policy implications of the Republican sweep.
“Trump victory [is] a surprise but path forward not all negative. … Clinton had been the favored ‘horse’ in this election cycle for investors, so it is natural for markets to see Trump’s win as a ‘shock,'” Lee wrote in a note Wednesday.
“We see ‘negative’ shock, weakness as short-lived. … A sustained and deeper sell-off can only be justified if Trump’s victory leads to a U.S. recession.”
The strategist cited how historically, recessions were created by commodity shocks, central bank monetary policy tightening and “diminishing return on capital due to excessive investment,” not elections of unpopular leaders.