It’s that time of the year again—time for the midterm elections. Traders in the financial world have taken note and shifted gears to focus on the political betting markets, helping us gain unprecedented insight into the probabilities of what will happen in November. Let’s take a look at the current odds for the upcoming Congressional races.
Democrats currently hold a slight advantage in national polling and fund raising, which might suggest that all the political action committees backing Democratic candidates will have a chance of winning. Looking at the House races, the party currently holding the advantage is the Democratic Party, with a 14.9% probability of taking the lower chamber. The GOP is still favored to take back the U.S. Senate, with only a 3.8% chance of victory. Let’s take a closer look at the House races.
With the retirement of longtime Democratic Representative John Dingell, the people of Michigan’s 15th District are faced with a fight for representation. Incumbent GOP Representative Dan Benishek is the favorite to win the seat, with odds of 2.3 to 1, but newcomer Gretchen Anderson, a self-described “common sense Republican,” has her eye on the seat. Anderson raised a huge sum of money in the most recent fundraising quarter, and while she has a long way to go before she can claim victory, the intraday market is giving her a better than average chance at winning. We’ll have to wait until election day to find out if Michigan voters agree.
The Safe Districts
The Democratic Party needs to protect a lot of House seats in November, with 10 of the party’s 17 seats currently considered “safe.” While some of those districts are truly competitive, others are simply too far removed from the population centers to pose much of a threat. Take California’s 39th District for example. Despite the district’s location in the shadow of the San Francisco Bay Area, the fundamentals in the district—a suburban, college-educated voter—pose no threat to the Republican candidate, Diane Harkey, who has odds of 6.2 to 1 of keeping the seat she was appointed to when Tim Murphy, who had held the seat since 1973, resigned to take a job in the Trump administration. The 39th District is one of the seats most likely to stay in the GOP column.
The Toss-Up Districts
With all the money in the world being put into elections, it’s not surprising that all the House seats are up for grabs. The intraday market, however, gives us insight into which districts are most likely to be won and by whom. Take California’s 7th District, for example. Despite the fact that the Sacramento suburbs are dominated by Republicans, the fundamentals in the district—a suburban, college-educated voter—pose no threat to the Democratic candidate, Jessica Mitford. The same goes for Kansas’s 4th District, which is also seen as a toss-up. The candidate in this race, incumbent Democratic Representative Joe Knollenberg, is struggling to keep his seat in the face of a strong challenge from former State Representative Susan Wagle. The difference in opinions and policies between the two is what makes this a competitive race. Knollenberg’s bid for a third term is one that’s being closely watched by political junkies.
The Rising Stars
A number of candidates in this year’s elections have emerged from relative obscurity to throw their hat into the ring. These include Alexandria Ocasio-Cortez, who is running for the Democratic nomination in the New York 14th District, and Jailed Republican gubernatorial candidate Joe Dineen, who is looking to unseat Democratic Governor Andrew Cuomo. We’ll have to wait and see if these candidates can make their voices heard above the din of the electoral campaign, but their star is on the rise, as evidenced by their odds of winning.
The Senate Favorites
The outlook for the Senate seems a little more positive for Democrats than the House race. Incumbent Democratic U.S. Senator Bernie Sanders is favored to win re-election in Vermont, with odds of 6.5 to 1, whereas his Republican challenger, Scott Milne, has less of a chance at victory. The race in Michigan between Democratic incumbent Senator Debbie Stabenow and Republican challenger John James is also seen as a toss-up. The fundamentals in both races favor the Democratic candidate although the gap is narrower in Michigan. James raised a large sum of money in the most recent fundraising quarter whereas Stabenow, who has held the seat since 2013, did not. James tried to portray himself as the more moderate alternative to Stabenow, but the reality is that his views are pretty close to hers. This is one Senate race that could go either way.
The Dark Horses
No one is safe from the surprise challenge of a dark horse. Montana Republican Greg Gianforte has emerged from the wilderness to take on incumbent Democratic Representative Tim Walz in the battle for the state’s at-large congressional seat. It’s too early to tell if Gianforte’s unlikely campaign will pay off, but his odds of winning have ballooned to 12 to 1, suggesting that this could be one upset election this year.
What About The President’s Race?
The most closely watched race this election year is undoubtedly the battle for the White House. Will Donald Trump be able to hold on to the office he was elected to in November? The short answer is yes, but not by much. With the odds of impeachment hanging over his head and an economy that is struggling to regain its footing, Trump’s odds of being impeached and removed from office have more than doubled, making him one of the most unpopular presidents in history. The question for investors, however, is whether or not the impeachment will have an impact on the 2018 election. It’s hard to say, but the odds of Trump losing the popular vote by a large margin and taking back the presidency are still pretty slim. Most forecasters expect the president to win in a close vote, which means there is a slight chance that this will be the “toss up” election that nobody wants to see.