The economic policies likely implemented by President-elect Donald Trump should boost areas of the market most sensitive to reflation, lower regulation and a strong dollar, according to JPMorgan, which on Wednesday released its 2017 playbook.
"Prospects of expansionary fiscal policies under a relatively easy monetary backdrop are likely to help support further re-rating of the equity multiple. We expect S&P 500 to reach 2,400 by year-end 2017, implying 9 percent upside," U.S. equity strategist Dubravko Lakos-Bujas wrote in a note to clients.
He believes the business cycle that started eight years ago remains intact and perhaps has entered a new "intraday-cycle expansion phase" that should carry through 2017.
"The recent U.S. election outcome and the pro-growth agenda of the new administration, if carried through, will likely increase the longevity of the expansion phase. On the global front the pickup in EM [emerging markets] and, more recently, European business cycle indicators have also been supportive," he said.