US: Pennsylvania election outcome points to trouble for Republicans - AmpGFX

As the mid-term US elections in November approach, political uncertainty is set to increase and the risk is significant that the Democrats take control of one or even both houses of Congress, according to Greg Gibbs, Analyst at Amplifying Global FX Capital. 

Key Quotes

“The result of the Pennsylvania 18th District Special Election on Tuesday appears to increase this probability.”

“The result is currently too close to call, but Democrat candidate Lamb appears to be in front.  Trump won this district by 20 points in the November 2016 election. On the face of it, this suggests there has been a big swing against Republicans that may reflect a Trump backlash.  If repeated in the mid-term elections it would propel Democrats to a big win.”

“The Republicans can claim that the Pennsylvania result is not representative since Lamb was a moderate who was not in favour of gun-control, and backed the tariffs, a Trump policy that appears to have more Democratic support than from his own party.”

“The Democrats can claim it is representative since Trump stumped for the Republican candidate Saccone.”

“Both are probably right to an extent, but certainly, the result is such a significant swing that it may point to a more energized anti-Trump vote that could make a difference in the mid-terms.”

“The Democrats can also claim a trend with the victory in the Special Senate Election for the State of Alabama in December and the Gubernatorial election in Virginia last November.”

“Democrats have a 67% probability of winning control of the House of Representatives. This probability has increased in the last two days from 63% in the lead up to the Pennsylvania election.”

“The Senate race is still seen to favour Republicans retaining control.  This reflects the greater number of Democrats up for re-election and the individual cases where more of these races are in toss-up states.  This is despite the fact that Republicans hold only a slim one seat majority in the Senate, after losing the seat of Alabama in a special election in December.”

“Nevertheless, the probability of a Republican victory has declined in the two days leading up to the Pennsylvania election from 68% to 65%.  Given the narrow margin of Republican control in the Senate, the risk of Democrat’s winning control is not insignificant.”