Larry Glazer believes a bullish scenario is unfolding on Wall Street, just in time for the holidays.
The $3 billion money manager points to impending Washington gridlock as a major factor in his optimism. The polarized result of the midterm election, which saw the House swing to Democratic control but preserved the GOP’s hold on the Senate, might help spur market gains, Glazer said.
“Investors’ worst case fears were not materialized during midterms,” Mayflower Advisors’ managing director told CNBC’s “Futures Now” last week. “A split government may not be what everybody wants, but it may be what investors want.”
According to Glazer, a split Congress should prevent President Donald Trump from getting additional stimulus passed. As a result, Glazer contends it’ll put less pressure on the Federal Reserve to get more aggressive with its interest rate hikes.
“Had the Republicans really swept, you’d have more likely more stimulus coming into the market. [That] was the fear — whether it’s accurate or not. That fear means the potential for higher rates,” he said.
But now, that risk is subsiding. With uncertainty fading, Glazer is calling for stocks to rally 5 to 10 percent by year-end.
“You do have the backdrop of maybe this is the best of both worlds for investors going into the end of the year, and the beginning of next year,” Glazer added. “They can ride through this rally here.”
It’s not just the midterm results driving Glazer’s optimism. He believes lower energy prices will give consumer spending a boost in the key holiday shopping season. WTI crude is trading at low levels not seen since March.
“You really have to consider the fact that the precipitous decline in energy prices caught everybody by surprise. It’s really going to be a tailwind to keep this market afloat,” said Glazer.