The Stock Market's Biggest Bull Says the Trump Rally’s Just Beginning

Binky Chadha, Deutsche Bank AG’s chief global strategist and the most optimistic stock market analyst on Wall Street, says the rally since Donald Trump’s election is only beginning.

Many investors are incorrectly attributing $2 trillion of gains in stocks since early November to expectations for stimulus and policy changes, Chadha wrote in a note Thursday. He believes the rally is reflecting nothing more than the removal of uncertainty around the vote. Looking at equities, Chadha wrote that they aren’t expensive on an absolute basis and will extend recent gains as earnings and the economy improve.

This view is at odds with stock market skeptics, such as Ray Dalio and George Soros, who’ve said the post-election rally may grind to a halt.

Chadha, on the other hand, sees the S&P 500 Index hitting 2,600 by year end, higher than any other analyst forecast in last month’s Bloomberg survey of 18 Wall Street predictions and 13 percent beyond the gauge’s record close of 2,307.87 on Thursday. He sees an increase in share buybacks and “extreme” short positions in rates will send stock climbing and expects selloffs on any stimulus disappointment to be brief.

“The post election ‘Trump rally’ has not reflected expectations of policy changes or stimulus,” Chadha wrote. “It in fact followed the typical trajectory around close presidential elections, pricing out the uncertainty risk premium rather than pricing in policy changes or stimulus; ditto for the move up in bond yields.”

Futures on the S&P 500 rose 0.1 percent as of 5:05 a.m. in London on Friday.