(New York)

The stock market has been given a lot of time to adjust to the midterm elections and their likely outcome. Most think Democrats will take back the House, while Republicans will hold the Senate. So what is the market saying about how different sectors will perform in that scenario? The answer is that stocks in the defense and infrastructure space are doing well, as most don’t see a fiscal tightening. Infrastructure spending is also seen as a bipartisan issue. Pharmaceutical companies are also benefitting as a split congress would be less likely to pass legislation to lower drug prices. Stocks impacted by trade tensions have continued to suffer as no one sees a bright outcome on that front.

FINSUM: So the market’s assumption are showing through, but that heightens the risk of what happens if the election does not go to plan. For instance, what happens to pharma prices if the Democrats sweep?