When looking at this more than odd election season, Bank of America’s Chief Investment Strategist Michael Hartnett and his team see opportunity to get ahead of new trends. Buy stocks until near the election, they say, but recognize afterwards there will be clear winners and losers depending on the outcome. When looking deeper into his analysis, perhaps it is themes that are winners regardless of who gets the most votes that might be most interesting. And here a trend related to fiscal stimulus is noticed by the researchers.

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Buy stocks – How can the US Presidential election even be close?

It is important to view the investment landscape without emotion, particularly as a populist emotional election is approaching.

In late August the prevailing establishment consensus thought the US Presidential election would be an easy victory for the establishment candidate. Much like Brexit, they along with the betting markets and bookies got it wrong.

A Hillary Clinton election victory, all but a forgone conclusion at one point, now appears to be a “coin flip” where there is no election risk for a Trump victory, JPMorgan’s Marko Kolanovic recently noted. BAML, for its part, notes a close election outcome as well.

What leaves political analysts shaking their head in disbelief may, at the same time, offer degrees of investment opportunity. Not only will opportunity vary depending on who wins, but larger cyclical trends regarding “inequality” may be emerging that regardless of the victor could result in important investment trends.

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BAML: Buy stocks which are well supported leading into election

BAML’s Hartnett, along with Investment Strategists Brian Leung and Jared Woodard, think that the market could receive significant support heading into the election but advise being careful on the timing of this trade. There could be volatility at some point, particularly when the Fed determines is the appropriate moment to remove the needle injecting “stimulus” into markets.

Hartnett and his team tend to agree with Kolanovic that stocks might run higher drifting into the election – “buy what central banks buy and support,” is generic advice they give. “It is risk-on as central banks successfully postpone ‘bond shock’ and too many positioned for correction.”

But be careful. Be very careful.

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The current stock market thrust higher might not have the staying power and it “will need to be faded as election approaches.” Once the election has run its course this is the point “a more profound trend change is afoot.”

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Buy stocks – Mean reversion trade: Move to inflationary assets

Following the “buy what central banks buy and support,” at a high-level Hartnett sees inflation coming regardless of who is the next US President.

Pointing to the TIPS market as did Jeffery Gundlach and Bloomberg’s Lisa Abramowicz this morning, Hartnett and his team are starting to see the whites of inflation’s eyes, early warning signs that higher prices could be around the corner.

With a potential shift from central bank monetary policy to fiscal policy, Hartnett connects logical dots to determine that the relative outperformance of deflationary assets might come to an end. It is not just a policy shift that is driving inflation, but valuations at extremes and a worn economic cycle that is ready to change.

This trend shift is important to recognize because it is so early in the cycle. “Almost nobody is positioned for ‘inflation’ assets to outperform ‘deflation’ assets,” they wrote.

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Buy stocks – Investments that fit various market environments, including a “war on inequality”

The theme of switching from monetary policy, which primarily boosted the performance of the stock market and other investible assets, to fiscal policy, which targets a wider range of the economy, will create winners and losers regardless.

If Clinton or Trump wins there is likely to be a “populist desire for a ‘War on Inequality’ emerge.”

Hartnett is not just identifying a momentary fad, but a trend that could propel policy for a two-term president. While that doesn’t seem likely today, if fiscal stimulus works magic and raises the wages of the middle class, the political leader to emerge from such a feat – and be given credit — is likely to win again.

And of course there is the potential failure of fiscal stimulus, which could balloon deficits and raise “creditworthiness” issues among investors.

Regardless of the success of fiscal stimulus, investing isn’t always about the end outcome. It can be catching the trend. The very implementation of fiscal stimulus is likely to create a market reaction initially, and this could lead to inflation.

In part, this explains the breakdown of the election investment winners and losers

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Buy stocks – What does a “War on Inequality” look like from an investment standpoint?

With the overall trend for a “War on Inequality” as a thesis core performance driver, there are two defined camps.

Under a Clinton election victory, those that benefit include Wall Street, deregulation, 1%, Capitalism, Monetarism, Globalization. This transforms into an investment thesis that sees equities moving higher, particularly in Technology, Consumer, Growth and High Yield categories – along with Passive investments.

A Trump victory, however, sees Main Street winning along with regulation and the 99%. This will bring with it Socialism, Keynesianism, Protectionism and Deficits – all inflationary. This creates a market environment where Banks, Materials, Japan, Commodities benefit along with Value and Cash. Active management would benefit in this market environment.