Status of Major Legislation Is Up in the Air: With control of the House and Senate up for grabs, leaders on both sides of the aisle are unclear how the outcome could impact key legislation. If Democrats take control of even one house of Congress, it will be much more difficult for the complete Republican agenda to be enacted. That means shelving any plans to repeal the Affordable Care Act or reform immigration. More likely, though, the two parties will have to find common ground on key political issues.
Midterms on Investors’ Minds: Wall Street will be closely watching how the battle for power and potential new policy decisions impact the market and global economy. Without Congressional support, the President can still choose to raise trade tensions with China through executive orders, a move that could add further dollar strength. In turn, that development could potentially slow global economic growth.
Impeachment Looms Large: The impeachment question also hangs over the midterm elections. If Democrats win control of the House of Representatives, it raises the distinct possibility that the House could vote to impeach the President. Keep in mind, the President would then have to be tried in the Senate, which requires a two-thirds vote (67 senators) to remove him from office.
Politics and Investing Don’t Mix: As we’ve seen throughout history, a single political event, even impeachment, hasn’t been enough to derail the market over the long term, but it may bring near-term volatility. We think investors are generally better served when they resist letting the current political environment influence their investment decisions and instead work with their advisors to maintain a long-term financial plan that suits their needs.
Read more details in “What Midterm Elections Mean for the Markets”
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