The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
The United States (US) mid-term elections on Tuesday saw a record attendance, possibly the highest in a century for a mid-term. Mid-term congressional elections are usually seen as a performance scorecard on the acting US president as the candidate completes half of the four-year term.
The predicted outcome is for the Democrats to take control of the House, and for Republicans to hold on to the Senate. FoxNews expects Democrats to take control of the House, and the Democrats could win as many as 35 seats, according to CNN’s predictions.
The House has 435 members, and the last time Democrats took control of the House was 8 years ago.
As at 6.41am GMT, Democrats own 207 seats in the House, while Republicans have taken 190 seats. For the Senate, Democrats have 43 seats while the Republicans have 51 seats.
In the latest race, Democrats have met expectations on the seats they were expected to flip, but there was no “blue wave” the Democratic Party had hoped for. Experts had predicted that the party would narrowly secure a majority in the House.
The Democratic Party has made the mid-terms into a choice between two Americas – one which is inclusive and embraces diversity, and the other a narrow and exclusionary country.
What happens next
The winning of the House for Democrats will be a downer to US President Donald Trump’s legislative plans.
Liberals are likely to investigate into Mr Trump’s administration and business affairs, including placing a subpoena on his tax returns. Democrats are also likely to focus on hot button topics such as healthcare and climate change.
Even though the US President has a wide authority on foreign affairs, the House has the power to examine issues such as foreign agreements, and arms sales.
The mid-term performance is seen as a signal on the US public’s sentiment towards Mr Trump’s presidency thus far, and a sneak preview of how the show for the re-elections in 2020 would pan out. Experts think Mr Trump is likely to continue pushing for policies to grow the US economy and use the better growth numbers seen by US in recent years as ammunition for his re-election.
The US economy is on track for a 3% growth this year, which would make it the best showing since 2005. Unemployment is down to a 49-year low at 3.7% based on Labour Department readings for September, and wages are edging higher at over 3% from a year ago, according to a report from ADP Research Institute in July.
Trade war mediation may be on the table
With his re-election in sight, the US president may attempt to resolve trade tensions with China. The US and China will meet at the G-20 summit at the end of this month.
China is ready to work with the US to resolve the trade disputes. On Tuesday, China’s Vice President Wang Qishan said in a forum that both countries will stand to lose from the ongoing clash ofwords.
Both China and the US are locked in a tariff war, an act which is causing financial markets to shake wildly. The International Monetary Fund has downgraded expectations on the global economy for next year, blaming the trade war as part of the reason for the weaker numbers.
.jpg)
