Credit Suisse: 'Toned down' Trump to spark growth, lift bond yields; what to own

Donald Trump
Carlo Allegri | Reuters

Credit Suisse believes much of Donald Trump's rhetoric on nationalism is likely to fade away as he takes the Oval Office, which should result in continued economic growth and spark a rally in a group of stocks that align with his political agenda.

"Most of Trump's more troubling policies (on immigration, protectionism) are likely to be toned down, and some of his policies can be seen as positive for equities (more fiscal spending and a cut in the corporate tax rate)," wrote Andrew Garthwaite, head of global equity strategy at Credit Suisse.

"Thus, we can envisage a set of circumstances under which this election result is positive for equities, although we would caution that markets tend to overreact to political shocks," he said.

Since President-elect Trump won, the Dow Jones industrial average reached a new all-time high as investors digested the news and became less fearful on the future path of the world's biggest economy. The index, a broad measure of the stock market, is trading within 2 percent of a record price.