Biden-Trump isn’t the only matchup to watch. FiveThirtyEight also forecasted how the races in the Senate and House of Representatives might play out.
Democrats are favored to win the Senate. And at the very least, they have an 80% chance of holding between 48 and 55 seats.
- Sample of 100 Outcomes: Democrats win control in 75, Republicans do so in 25.
- Average Seats Controlled By Party Forecast: Democrats 52, Republicans 48
The five closest races in the Senate:
- Georgia: David Perdue (R) versus Jon Ossoff (D)
- Iowa: Joni Ernst (R) versus Theresa Greenfield (D)
- Maine: Susan Collins (R) versus Sara Gideon (D)
- Georgia Special Election: Raphael Warnock (D) is favored
- North Carolina: Thom Tillis (R) versus Cal Cunningham (D)
Democrats are also favored to win the House but in a much more definitive fashion. FiveThirtyEight estimates they have an 80% chance of holding between 225 and 254 seats.
- Sample of 100 Outcomes: Democrats win control in 97, Republicans do so in 3.
- Average Seats Controlled By Party Forecast: Democrats 239, Republicans 196
- Popular Vote Margin: Democrats +6.3%
The five most competitive races in the House:
- Indiana-5: Victoria Spartz (R) versus Christina Hale (D)
- New Jersey-2: Jefferson Van Drew (R) versus Amy Kennedy (D)
- Virginia-5: Bob Good (R) versus Cameron Webb (D)
- Oklahoma-5: Stephanie Bice (R) versus Kendra Horn (D)
- Pennsylvania-10: Scott Perry (R) versus Eugene A. DePasquale (D)
If Democrats win the Presidency and Congress, an outcome called a “Blue Wave” or “Blue Sweep,” that would imply larger near-term stimulus packages but also higher long-term corporate taxes. That would mean a potentially stronger stock market short-term, but we should be wary of future increased corporate taxes shaving 7-10% off corporate earnings. I am also wary of harsher lockdowns throwing us back into a deeper pandemic economy like in the spring.
The second most likely scenario is a divided government and gridlock, which would maintain uncertainty in the markets, in my opinion.
I am increasingly convinced that we are in for a very interesting next four years as investors because we’ll either have elevated levels of uncertainty or broad, sweeping policy changes.