Predictions haven’t changed much in recent weeks. The Republicans will likely maintain control over the Senate, but the Democrats will take the House of Representatives. Well, with just one day until the midterms, let’s look at some final predictions. For investors, the midterms influence on the markets is something to take seriously.
With the House, the key initiative for the Democrats, Karl Rove, a Fox News Contributor, thinks they have an uphill battle. The Democrats have 193 seats to the Republicans 235 – 218 is needed for a majority.
Nancy Pelosi, speaking with Stephen Colbert a few days ago on the late show states,
“We will win. We own the ground. We’re not yielding one grain of sand.”
While Pelosi is remaining overly confident, many forecasters and left-wing media sites are reducing their confidence levels as the midterms approach.
The Daily Wire summarizes poll averages from Real Clear Politics and Nate Silver’s FiveThirtyEight, to determine the likelihood of the Democrats taking control of the house:
“Republicans currently have 194 “safe” seats (20 likely and 25 leaning). Last week, RCP gave Republicans 196 “safe” seats and Democrats 203. If those numbers hold up, that means the Democrats only need 16 of the 39 tossup seats to attain the 218-majority in the House. Republicans, meanwhile, need to win 24. Thirty-three of the 39 tossups are currently held by the Republicans.”
Now, what everyone should focus on is that last sentence. “Thirty-three of the 39 tossups are currently held by the Republicans.” Here is why that matters.
Midterms Influence | The Power of Incumbency
Karl Rove, a Fox News Contributor, explains that “In 9 of 10 midterms since 1974, more than 90% of the incumbents have been re-elected.”
If about 90% of Republican incumbents win, the midterms could go very differently than planned for the Democrats.
Midterms Influence on Stock Market
In a Forbes article from November 2nd, Here’s How Stocks Perform After Every Midterm Election Since World War II, the market should be in fine shape. Contributor Stephen McBride explains,
“Since 1946, there have been 18 midterm elections.
US Stocks Have Climbed Higher in the Next 12 months After Every Single One
Every single one.
That’s 18 for 18!
I’ll repeat it because this is so important:
For each of the past 18 midterms, stocks have always climbed higher a year later.
Always.
We’ve had every possible political combination in the past 72 years.
Republican president with Democratic Congress. Democratic president with Republican Congress. Republican president and Congress. Democratic president and Congress.
The market climbed higher every time.”
So, if history is any guide, investors should have little cause for concern. With that said, the US economy has incredible momentum, and Trump has reduced more regulations than any sitting President in his first two years. And, with the threat of impeachment looming, should the Dems secure the House, some of his initiatives may be in jeopardy. Either way, tomorrow is going to be interesting, and Trump is campaigning as if his political life is on the line. A very bad sign indeed, for the Democrats.
