Tom Lee: Trump win could produce major bull market — here’s what I’m buying

The so-called Trump rally could live on ... and on, and on, according to Fundstrat's Tom Lee.

In a note to clients this week, Lee wrote that President-elect Donald Trump's term could usher in a major bull market akin to those preceded by the administrations of Dwight Eisenhower and Ronald Reagan.

"Notably, the two longest bull markets in history 1953-1974 and 1982-1999 were preceded by a Republican 'revolution,'" he wrote.

Lee likened Trump to the Republican presidents in this way; Eisenhower in the early 1950s invested in infrastructure, and Reagan pursued tax cuts and deregulation, Lee wrote, much like what Trump has promised to carry out in his presidency.

The markets have been broadly positive in reaction to Trump's win. Since Election Day, the S&P 500 has gained 3 percent and the Nasdaq and Dow Jones industrial average have both climbed 4 percent, with the Dow breaking through 19,000 for the first time.

At this juncture, Lee urges investors to remain "contrarian."

"And that means — don't do consensus trades. Focus on groups that have lagged in the last seven years; that means energy, basic materials, mining, steels, [communication] equipment, industrials, tech," Lee said Wednesday on CNBC's "Trading Nation."

Avoid crowded trades, he said, like health care and consumer cyclicals, what he deems "consensus trades."

And even though financials have rallied postelection, Lee points out that the group has underperformed the market since 2009 — so even though the banks have seen a nice run, it could be "five or six years of outperformance."


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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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