Three reasons why markets would love a President Hillary Clinton

Greg Valliere at Potomac Research says Hillary Clinton, "has to be considered the favorite to win the presidency."

And for the markets, Valliere thinks a Clinton presidency would be a positive.

"Our very early bottomline is that the markets could gladly live with her," Valliere wrote in a note Tuesday.

Valliere gives three main reasons why:

• A divided government is good for markets: Stocks rose over 200% when Bill Clinton was president. Hillary would have to deal with a Republican-controlled house - currently a 246 - 188 majority, and the GOP is likely to be in control until the next redistricting exercise in 2021.
• She'll avoid the "us-versus-them rhetoric" against Wall Street, with a more moderate approach to big business than President Obama.
• She's a crony capitalist, or someone who would develop a close relationship with businesses and give them incentives to invest in the economy. While some like senator Elizabeth Warren see this as a problem, it's actually a plus for Clinton because she would look to market leaders for advice more than Obama has. Regulations on business would not be as tough as they are under Obama, if she wins.

And what's more, Valliere adds that if the 2016 presidential race turns out to be Hillary Clinton versus Jeb Bush, markets will find either winner acceptable.