Midterm Elections Loom Over the Stock Market

Nate Silver’s FiveThirtyEight.com, my go-to source for election predictions, currently gives the Democrats an 86% chance of capturing a majority in the House in the Nov. 6 midterm elections.

If Silver is right — and almost every political observer thinks he is — Republican control of the White House and both houses of Congress will end after a two-year stretch.

That could be bad news for stock investors. Gridlock in Washington is a major minus for the stock market, says Sam Stovall, chief investment strategist at CFRA Research.

That’s a surprise to others on Wall Street, who argue that the fewer laws enacted in Washington, the better for investors.

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