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Expect fiscal stimulus from new president, but market risks ahead, expert says

What will a Clinton or Trump win mean for the market?

The next boost to the economy and stock market may come in the form of fiscal stimulus, no matter whether Donald Trump or Hillary Clinton wins in November, investment strategist Savita Subramanian said Wednesday.

"Both have been fairly vocal about maintaining that they would spend a little money to help the U.S. economy. How they spend it seems to be in different ways," the head of U.S. equity and quantitative strategy for Bank of America Merrill Lynch said in an interview with CNBC's "Closing Bell. "

"The hope is that fiscal stimulus might actually reinvigorate the economy and get us to a better place," she said.

However, it's going to be a rough road for the markets between now and election day, she predicted.

"I actually see more risks than rewards as we head into the end of the year," Subramanian said.

The U.S. Capitol, reflected in a fountain full of coins on the plaza
Mark Wilson | Getty Images

For one, historically there has been increased volatility in equity markets in the five months heading into an election, she noted.

Companies also cut back on capital spending ahead of elections, Subramanian said.

While the timing of the next interest rate hike by the Federal Reserve could also affect markets, she's more worried that there have been three quarters of tightening by banks lending to corporations.

"That I think is maybe more profound from what the Fed is doing or what politicians are doing. You're actually seeing capital availability shrinking to the corporate sector," she said.

And she said that's something that has never happened without a bear market.

"That's what I'm worried about. A lot of indicators we're looking at are at levels that we haven't seen without a bear market, which is why we're looking at a little downside from here," she said.