Mid-term elections in the U.S. Congress are scheduled to take place on Tuesday, and investors are trying to find the best way to predict the election results and profit from them.
In the past two years, the Democrats have not gained political power in Washington. They have great hopes of winning control of the House of Representatives in the midterm elections, while the Republicans are expected to maintain their advantage in the Senate.
Here are some ideas from analysts, strategists and traders.
1: buying dollars at bargain prices
If the dollar falls against other currencies due to the election results, Citigroup believes that the dollar should be bought. "The results of the mid-term elections may not be a major turning point for the dollar as some investors fear," Todd Elmer, an analyst at Citigroup, wrote in the report.
Sponsor
Historically, the results of the mid-term elections are not strongly linked to the dollar's trend, so even if the Democratic Party wins in the House of Representatives, it is unlikely to block the dollar's rise.
2: even if Congress splits, FAANG shares may still fall.
Oliver Pursche, chief market strategist at Bruderman Asset Management in New York, said that in a split Congress, a policy move that seemed likely to pass was to tighten regulation of social media. "The Trump administration and the democratic party agree in this area," he said. "We expect this to happen in 2019." If that happens, Facebook, Twitter and Alphabet shares, already under greater pressure this year, could fall further.
3: buy construction stocks.
Dryden Pence, chief investment officer of Pence Wealth Management in California, wants to buy construction-related stocks because he expects that any party controlling Congress will pass the infrastructure proposal as part of Trump's agenda item. He said, "for the infrastructure industry, the most important thing about elections is that the election will pass." Pence's favorite infrastructure stocks include United Rentals Inc (URI.N), AECOM (ACM.N), Jacobs Engineering Group Inc (JEC.N) and Vulcan Materials Co (VMC.N).
Hot Model No.: