Updated: Dec 10, 2019
Investors have turned their focus towards U.S. congressional mid-term elections, but with the vote just days away, the potential impact on markets remains difficult to call and may largely depend on one of a few different voting outcomes.
#1 - Democrats take the House of Representatives, Republicans keep the Senate.
This is the scenario that is most widely predicted and is already largely priced in by investors. Even so, a gridlocked Congress has the potential to rattle markets because it gives the Democrats a real opportunity to trigger impeachment proceedings against U.S. President Trump.
While such efforts would most likely be thwarted by the Republican-heavy Senate and ultimately fall flat, the dirty laundry that would be aired as part of the process would be incredibly polarizing for the country and represents a huge potential headwind.