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Pro Analysis

Goldman's Trump playbook: Market to tread water; buy banks, sell biotech pop

A dog swims in a pond during a stag-hunting, on November 3, 2012 in Amboise.
Alain Jocard | AFP | Getty Images

The stock market will end 2016 about 2 percent lower from current levels in the wake of Donald Trump's surprise election, Goldman Sachs predicted in a note to clients Wednesday.

While the overall market will be stuck, Goldman said, bank stocks will outperform and biotech shares may disappoint.

"Following several years of gridlock inside the Beltway, the potential now exists for a number of legislative initiatives to be passed," U.S. equity strategist David Kostin wrote.

"Examples would include fiscal stimulus/infrastructure spending, corporate tax reform, reducing regulation and addressing rising health care costs. However, the prospect of new legislation also raises uncertainty about policy specifics and may prompt corporations to delay action until details are finalized."