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Investors positioning for potential Democratic sweep

Hillary Clinton
Carlos Barria | Reuters

With the drop in Donald Trump's poll numbers in the past week, Wall Street is starting to brace for the prospect of a Democratic Party sweep in November.

If the Democrats do win the White House and majorities in both houses of Congress, there will be dramatic ramifications for several sectors in the economy, according to Strategas Research Partners.

"We are less than 100 days away from the election and the dynamics of the presidential race are changing," Strategas' Daniel Clifton wrote in the report Thursday. "But after a great Democratic convention and Trump's meltdown, Clinton is opening a lead that justifies the higher probability of winning. ... An 8-10 point Clinton victory will put pressure on Republican control of the House, which changes the investment implications of the election."

The latest NBC News-Wall Street Journal poll found Hillary Clinton opened a 9 percentage-point lead over Trump at 47 percent to 38 percent, almost double the 5-point lead she had before the conventions.

So how should investors position their portfolios if the Democrats run the table in November?

Clifton said if the Democratic Party wins the House it will be negative for pharmaceutical, biotech, energy companies and banks.