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INVESTMENT STRATEGY QUARTERLY

Challengers’ Trump Card

Many incumbent Democratic senators are running for re-election in states
Trump won in the 2016 presidential election.

2016 CURRENT
PRESIDENTIAL INCUM-
ELECTION RESULT BENT
SENATOR
Trump Democrat
Clinton Republican
Clinton Democrat
Trump Republican
* Maine and Vermont have
Independent senators who
caucus with Democrats

“ A Republican Senate and a Democratic House could potentially create
a Goldilocks scenario for the market: not too hot, not too cold. ”

a Goldilocks scenario for the market: not too hot, not too cold. We
strongly believe that the strength of the market since President KEY TAKEAWAYS:
Trump’s election has been tied to his deregulatory agenda. The • We view Democrats as favored to win a majority of
Senate alone confirms Presidential nominees, which require a seats in the House of Representatives and Republicans
simple majority vote. A Republican Senate equals a continuation of favored to maintain control of the Senate.
the Trump deregulatory agenda.
• We strongly believe that the strength of the market
In the House, we would be looking for potential breakthroughs on since President Trump’s election has been tied to his
immigration, infrastructure, and a potential fix to the SALT deregulatory agenda. A Republican Senate equals a
1
deductions as possible agenda items. Divided government is likely continuation of the Trump deregulatory agenda.
to produce spending bills that keep domestic and defense spending
at or near current levels, continuing a legislative agenda that • A key concern for the market would be the impact of
supports fiscal stimulus. Should the Democrats retake enough increased oversight in the House.
seats, a key concern for the market would be increased oversight • Caveats to consider to the current forecast are
by the House. candidate recruiting, the strength of individual
candidates, new district maps, and the strength of
Caveats to consider to the current forecast are candidate recruiting, the economy, which could serve to limit potential
the strength of individual candidates, new district maps, and the Republican losses this fall.
strength of the economy, which could serve to limit potential
Republican losses this fall.

All expressions of opinion reflect the judgment of Raymond James & Associates, Inc., and are subject to change. There is no assurance any of the trends mentioned will continue or that any
of the forecasts mentioned will occur. Economic and market conditions are subject to change.

1 SALT: State and Local Tax
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