The Midterms, the Economy, and 2020
Midterm elections tend toward mean reversion. With only two exceptions since 1934, the party winning the Presidency loses seats in the House two years later. And when a party holds the White House and both chambers, something that has happened only twice in the past 20 years, they lose at least one chamber in the midterms. Indeed, the most unusual election-night outcome this year was the President’s party picking up seats in the Senate despite losing seats in the House. Only three other presidents have pulled that off in the past hundred years: Richard Nixon in 1970, John F. Kennedy in 1962, and Woodrow Wilson in 1914. Of course, Democrats had a very difficult election map, with far more seats in play than Republicans. Democrats won two-thirds of Tuesday’s Senate races, but they needed to win 77% — 27 of 35 races — to maintain the status quo.Plus "The Week Ahead," a preview of next week’s potentially market-moving events.