Why a Biden victory will lift a group of beaten-down stocks at the expense of market leaders, according to JPMorgan

• The market could be on the verge of experiencing an internal rotation out of the winners and into the losers, sparked by a Joe Biden victory this November, JPMorgan said in a note on Monday.
• With polls favoring Biden and the chance of a clear result of the November election rising, stocks are likely to continue to trade higher after the election if Biden wins, according to JPMorgan.
• The bank said value stocks could outperform growth stocks after the election.
• Visit Business Insider's homepage for more stories.

A Joe Biden victory this November would move markets higher, JPMorgan said in a note on Monday.

Investors are looking for a quick resolution to the presidential election rather than a contested result — therefore, a clear-cut winner will help the market move past the associated uncertainty risk and ultimately move higher, JPMorgan said.

JPMorgan pointed to the 2000 election as evidence that the market wouldn't do well in a contested-election scenario. The S&P 500 fell 12% between that election and shortly after Al Gore conceded to George W. Bush that December.

With polls favoring Biden following the first presidential debate, JPMorgan said it appeared more likely that there would be a clear winner this November and that a Biden victory would "not be a negative for markets."

Read more: These 30 global stocks are positioned to stay on top in the 4th quarter as the contrast between a recovering economy and rising COVID cases keeps markets volatile, RBC says

Despite Biden's proposal to increase the corporate tax rate, JPMorgan said it believed that Biden would instead focus on rebuilding the economy and that any tax increases would be "watered down."

But a turn in the market leaders, like growth and technology stocks, "might be coming" after the November election, JPMorgan said.

Specifically, a rotation out of growth stocks and into value stocks could be sparked by a more reflationary backdrop, the potential for further stimulus, and positive news on the virus front, the bank said.

JPMorgan said that consensus estimates were that a COVID-19 vaccine would be announced "in the near term," with distribution and implementation in the first quarter of next year.

Read more: A 20-year hedge-fund vet shares the 3 stocks he thinks make the perfect play for a booming housing recovery as the US heads for the suburbs

A COVID-19 vaccine would help hasten the economic reopening, which, in effect, would benefit value stocks that are more tied to the physical economy. But a bigger benefit to value stocks would be a strengthening US dollar and a rise in Treasury yields, according to JPMorgan.

While a rotation out of growth and into value is possible heading into the end of the year, JPMorgan isn't recommending investors sell out of technology stocks.

Technology stocks are supported by buybacks and somewhat protected from a weak consumer, and "relative valuations still look undemanding," JPMorgan said.

JPMorgan isn't the only bank that views a Biden win as a positive for the stock market and the economy.

On Monday, Goldman Sachs said that a so-called blue wave this November would help drive economic growth on longer-term spending measures targeting infrastructure, healthcare, climate, and education.

Read more: MORGAN STANLEY: Buy these 16 stocks to cheaply invest in next-generation technologies and reap the future profits they generate