Stocks surged this morning. The rally followed news that the FBI found no reason to charge Democratic presidential candidate Hillary Clinton for her use of a personal email server as secretary of state.
- The Dow jumped over 300 points.
- The S&P 500 gained more than 40 points.
- The Nasdaq climbed over 115 points.
This cumulative rise in the markets is known as a "relief rally" - an uptick in market price that happens because an anticipated negative event did not happen.
And this particular relief rally seems to be calming uncertainty over a potential Donald Trump win in the U.S. presidential election.
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But in a note to investors today later acquired by Bloomberg, co-founder of the global finance advisory firm Fundstrat, Tom Lee, made a few points that counter this morning's rally...
Lee said that although there would be a stronger rally if Clinton wins, stocks would still rise if Donald Trump becomes the next president of the United States.
He gave Bloomberg eight hard-to-argue-with reasons to back up his claim - one of which includes the inevitable (and profitable) repeal of a landmark Obama administration law:
8 Reasons Why a Trump Win Could Make the Market Rally
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- Markets already discounted a Trump win with the recent 4% slide.
- A Trump win could put Republicans in charge of the presidency, the House, and the Senate.
- More than 100 business leaders have endorsed Trump, including Carl Icahn and John Paulson.
- The market's performance is driven more by economics than by who is president. "Many investors will identify strategies based on the specific platforms of the candidates and eventual winner -- this is intuitive and logical," Lee wrote. "We looked at six precedent contested elections, and interestingly, found that portfolio strategy tended to follow prevailing economic trends, rather than platforms."
- Markets did well even under unpopular presidents such as Lyndon B. Johnson.
- The "enormously unpopular" Obamacare would likely be repealed.
- There are merits in Trump's economic plans, including corporate tax cuts and higher infrastructure spending.
- Investors would focus on Trump's potential to reform Washington, or "drain the swamp," as he says.
Money Morning Chief Investment Strategist Keith Fitz-Gerald likewise believes that a Donald Trump win is one indicator that might trigger a stock market rally.
In fact, Fitz-Gerald has been saying this since March -- which was something FOX Business' Stuart Varney brought up with viewers on Saturday morning.
Have a look at why Fitz-Gerald still maintains that a Donald Trump win might signal a post-election stock market rally:
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