Investors don't fully appreciate what could happen when the next president is sworn in on Inauguration Day, January 20, 2017. With all eyes on Trump versus Clinton, pundits, politicians, and the investing public are sleeping on the ramifications of 2016 Congressional races.
What does current polling tell us about the current state of Congressional races? As you can see in the chart above, current FiveThirtyEight probabilities show a 74.3% likelihood that Democrats will control the Senate. This is important for investors to watch. Whether it be raising the minimum wage, taxation, infrastructure spending or regulation, Democrats and Republicans differ radically on these issues so who controls Congress will impact the agenda of whoever is in the White House.
Hedgeye Director of Research Daryl Jones what this means in today's Early Look. Did you know, Jones writes, that which way the Senate tips will impact whether firebrand Vermont Senator Bernie Sanders becomes the ranking member on the Senate Budget Committee (in the minority) or the Senate Budget Committee Chairperson? In other words, based on current polling, it's likely that the man who once described himself as a "socialist" will oversee the drafting of Congress's annual budget.
While it's interesting that Democratic candidate Hillary Clinton currently leads the GOP's Donald Trump by +6.4% in Real Clear Politics polling, and fivethirtyeight.com gives Clinton an 85% probability of winning the election. The Congressional races are what we should actually be watching.
And perhaps the more important question we should be asking ourselves...
Do you #FeelTheBern yet?
