US: Midterm Election uncertainty? – Nomura

Analysts at Nomura suggest that with 11 days till the 2018 US midterm elections, the basic outlook has changed little.

Key Quotes

“A variety of factors – public polling, fund raising, early voting and expert opinion – still suggest that Democrats are likely to take control of the House and Republicans are likely to retain control of the Senate.”

“Public polling for the House has generally been stable. Since early September the average advantage for Democrats in the so-called “generic ballot” polls has moved in a narrow range of 7.7-9.1%. Democrats also have maintained a significant advantage in fundraising with those currently running for the House raising $651mn compared to Republican candidates’ $474mn.”

“More Republican members of the House have retired or chosen to seek other office than Democrats (37 to 18) and so Republicans have to defend more open seats. As result, most experts continue to expect Democrats to take control of the House.”

“The situation in the Senate is somewhat different. More Democrats are up for reelection than Republicans (26 to 9).”

“Since the Justice Kavanaugh controversy, polls in a number of key Senate races have moved in favor of Republicans. As a result, it now appears that Republicans are somewhat more likely to retain control of the Senate.”

“It is worth noting that prediction markets currently assign a lower probability to a Democrat House victory and a slightly higher likelihood of Republicans maintaining the Senate.”