Deutsche Bank: Ideal election scenario for the market is a Clinton win, Republican Senate

A trader works on the floor of the New York Stock Exchange in New York City on Friday, Sept. 30, 2016.
Michael Nagle | Bloomberg | Getty Image

Deutsche Bank strategist David Bianco told investors the market will rally into year end as the election and Federal Reserve rate hike risks are now priced into the market.

"[With] attractive S&P upside into year end, we change our tactical call [the next 5 percent move in the S&P 500] to 'up.' We think election risk is now better priced, which improves reward/risk," Bianco wrote in a note to clients Friday.

"We think S&P will finish this year at 2100-2200, closer to 2200 if Republicans hold the Senate," he said.

The strategist's 2,150 year-end target for the depends on a "balanced outcome" for the election that maintains the current split party control of the presidency, House of Representatives and Senate.