All eyes are on the Nov. 6 midterm elections, with political watchers prognosticating the likelihood that both houses of Congress will stay in Republican control.
What are the chances? Three political watchers recently agreed on the outcome — that the House will flip to the Democrats and that Republicans will retain control of the Senate.
Bill Rys, director of federal government affairs at Citi, stated during a mid-October webcast on the midterms that he’s “70% certain that the Senate remains in Republican control,” with the House flipping to the Democrats.
Greg Valliere, chief global strategist for Horizon Investments, stated his view in his mid-October Capitol Notes briefing that “a tidal wave election is unlikely; maybe there’s a high surf warning for the Republicans, who probably will lose the House — but new polls show that the GOP has a very good chance of retaining control of the Senate.”
For advisors, a critical seat to watch is who takes House Financial Services Committee Chairman Jeb Hensarling’s seat. The Texas Republican announced last year that he is not seeking re-election.
Neil Simon, vice president of government affairs for the Investment Adviser Association in Washington, told IA at press-time in mid-October that should ranking minority member Rep. Maxine Waters, D-Calif., take over Hensarling’s spot, “expect aggressive [Securities and Exchange Commission] SEC oversight,” with Waters taking SEC Chairman Jay Clayton “to task if the SEC’s expected standards of conduct rulemaking isn’t sufficiently protective of investors’ interests.”
David Grim, former director of the SEC’s Investment Management Division, stated in early October that he expects the SEC to vote on a final standards of conduct package for brokers and advisors likely during the first half of 2019.
Also he expects that the House, under Democratic control, “will prevent any further roll-backs of the Dodd-Frank Act.”
During the Oct. 12 Citi webcast, a quick-poll was taken of attendees on which candidate they’d vote for — Republican or Democrat — if the election for Congress were to be held that day. The results: 53.8% voted Republican; 46.2% voted Democrat.
That poll withstanding, “We think [Nov. 6] should be a pretty good night for Democrats,” Rys said. The “generic ballot has trended to favor Democrats over past few months.”
Midterms, historically, “have lower turnouts than general elections” Rys continued, with Republican vote turnout tending to be higher than Democratic voters.
“One thing that makes politics difficult is the mood changes dramatically,” Rys said, “but enthusiasm is with Democrats.”
Citi also performed a poll asking: What issue will most impact your vote in the upcoming election?
The results: Economy 43%; Trump 37.6%; and Healthcare, 6.3%