NEW YORK (TheStreet) -- U.S. stocks advanced more than 1% on Wednesday as investors decide which stocks will be winners and losers under President-elect Donald Trump, The Lindsey Group's chief market analyst Peter Boockvar said on CNBC's "Closing Bell" on Wednesday afternoon.
This strategy is "somewhat rational" because healthcare stocks, for example, are getting a "pass" since Democratic candidate Hillary Clinton was expected to crackdown on drug pricing if she had won, he noted. Trump is expected to spend on defense and is not expected to suppress big banks, meaning defense and financial stocks also get a pass.
"The question is what happens to the rest of the market? Because we're also seeing a rise in interest rates," Boockvar noted.
The bond bull market is "over," he claimed.
"Is this good inflation or bad inflation?" CNBC's Kelly Evans asked.
"I'm of the belief that inflation is a tax no matter what," he answered. "There is never really a good inflation. Wage inflation is good inflation. Price inflation is not good inflation, so it depends on what kind of inflation we're talking about here."
"Does this mean the bond market is doing the Fed's job for it right now?" Evans asked.
"It is doing the job because the market knows that [Fed Chair] Janet Yellen is going to drag her feet in the response to the rise in inflation," Boockvar claimed.
The Fed is expected to raise rates at its December meeting, but if Yellen waits until 2017 when the market forces her to do so, then that's "much different than her raising rates on her own volition," he noted. The two scenarios will create a "different outcome in terms of their policy."
The question going forward is, "How do equity prices respond to a rise in interest rates when the last five years they've been medicated on low interest rates?" Boockvar said.