As of Monday, election forecasts from FiveThirtyEight give the Democrats an 85% chance of gaining at least 23 seats and taking majority control of the House, with Republicans predicted to hang onto the majority in the Senate.
With odds-makers pointing to a divided government, many investors see this as a positive scenario.
Sentiment from analysts out of Blackrock, Bank of America an Citigroup reveal a common theme: Gridlock is good for stocks.
Add to that, a seasonal bullish tailwind – since 1982, the final two months of the year during a Midterm Election have been quite positive for stocks, including when the House changes hands.
The Nasdaq leads, gaining over 5 percent, trading positively 78 percent of the time.
Meanwhile, the Dow and S&P both log gains of better than 3 percent.
Compare that to all years in the final two months: the S&P gains 2.95 percent, the Nasdaq gains 3.37 percent and the Dow gains 3.4 percent.
