Markets Meet The Midterms
Спикеры
Monica Guerra
— Глава отдела политики, Morgan Stanley Wealth Management
Monica Guerra presents Morgan Stanley's base case for the 2026 midterms: Democrats flip the House, Republicans hold the Senate, leading to divided government. She highlights affordability as a key voter concern and argues the post-election period, when policy uncertainty clears, offers the best opportunity for investors. Specific sector implications favor defense, technology, and financials, while healthcare, energy, and private equity face greater risks.
- Base case: Democrats flip the House (need net 3 seats), Republicans retain the Senate.
- Affordability and gasoline prices matter more for voters than strong GDP growth.
- Historically, S&P 500 performance is subdued before midterms but strong in the following year, especially under a Republican president with split Congress.
- Divided government creates a stable policy backdrop, benefiting defense, technology, and financial services.
- Sector risks are pronounced in healthcare (drug pricing, regulation), energy (permitting unevenness), and private equity (scrutiny from a Democratic House).
- Data center electricity demand is surging, driving up wholesale power prices and local opposition.
- Investors should focus on the clarity that emerges after Election Day rather than pre-election uncertainty.
Идеи
S&P 500 rallies post-midterm election.
Historically, the S&P 500 performs well in the 12 months after midterm elections, averaging a 13% gain, and a 23% gain under a Republican president with split Congress. Markets tend to respond well once policy uncertainty clears, so the more important opportunity may emerge after Election Day.
Tech benefits from policy stability and AI investment.
Divided government limits sweeping legislation, creating a stable backdrop for technology. The sector should continue to benefit from long-term investment in AI, semiconductors, enterprise software, and cybersecurity, despite state-level regulatory patchworks.
Divided government favors defense sector.
Divided government would make sweeping legislation difficult, creating a more stable backdrop for defense. Defense spending has historically attracted bipartisan support, particularly when geopolitical tensions are elevated, making the sector attractive.
Financials gain from regulatory clarity.
Divided government creates a more stable backdrop for financial services. Financial institutions could benefit from greater regulatory clarity, more flexible capital requirements, and a potentially more supportive environment for mergers and acquisitions.
Healthcare faces regulatory headwinds.
Sector risks are more pronounced in healthcare. Healthcare could face continued uncertainty around drug pricing, reimbursements, tariffs, and regulation, making it unattractive under the expected political outcome.
Private equity faces political scrutiny.
Private equity is a sector risk. Private equity firms and portfolio companies in areas such as healthcare, housing, and consumer services could face greater scrutiny from a Democratic House, posing headwinds.
Energy sector faces permitting unevenness.
Energy is a sector risk. While demand remains strong around data centers and power infrastructure, permitting constraints and differing federal and state local rules could make development more uneven, complicating the sector outlook.
Далее
This Morgan Stanley video, published August 06, 2026, features Monica Guerra discussing SPY, XLK, ITA, XLF, XLV, PSP, XLE. 7 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Monica Guerra · Tickers: SPY, XLK, ITA, XLF, XLV, PSP, XLE