Goldman Sachs told investors to sell government bonds and buy gold as a hedge due to the prospect of future inflation from Donald Trump's economic agenda.
"The implications of a clean Republican sweep of both houses is probably as important for the markets as the unexpected presidential result. ... Market performance indicates a continuation and intensification of the reflation trend since the summer," Goldman's chief global equity strategist, Peter Oppenheimer, wrote in a note to clients Wednesday.
"Following several years of gridlock between the houses, the potential now exists for a number of legislative initiatives to be passed. Our U.S. strategists point to the possibilities of fiscal stimulus/infrastructure spending, corporate tax reform, reducing regulation and addressing rising health-care costs."