Is this the start of a new bull market?

In mid-afternoon trading, the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) is up 1.2% it appears on the back of increasing likelihood of a Hillary Clinton win in the US election.

The markets have been falling over the past month or so as investors guessed what the election of Donald Trump as president would mean. In simple terms, it probably wouldn’t be a good thing for global growth and therefore companies and stock markets.

But the news appears positive today after Clinton was cleared by the US Federal Bureau of Investigation (FBI) of any wrongdoing by using a private email server. The odds of a Trump victory now appear long – although not zero.

With the shock Brexit outcome still fresh in investor’s minds, it wouldn’t be impossible for Trump to win.

Should Clinton win on Wednesday – Australian time (Americans go to the polls on Tuesday, November 8), today’s rise could be the start of a new bull market. It’s certainly one less thing for investors to worry about.

An increase in confidence could also see companies express their trust by expanding operations, spending more and hiring more staff. Consumers could also start spending more of their cash – which retailers would be no doubt be euphoric about.

Those moves could start to generate stronger economic growth worldwide, and allow central banks to begin raising interest rates back to more ‘normal’ levels.

Australia’s big four banks Australia and New Zealand Banking Group (ASX: ANZ), Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC) would certainly be much happier, as credit growth has dropped dramatically in recent years. Forced to raise capital through equity raisings has also seen earnings per share drop – and when that happens, share prices tend to fall.

November 7 could be the start of an early Santa rally.

Discover the 'new breed' of blue chips that could take your portfolio higher

Forget ANZ and the banks. These 3 "new breed" top blue chips to buy now pay fully franked dividends and offer the very real prospect of significant capital appreciation. Click here to learn more.

The report is free! No credit card required.

Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.