PertAndPlump

This is JP Morgan’s view is Wall Street consensus. It assumes there is one Democratic Party. My view aligns more with Democrat Strategist Jim Carville, who spoke on the Bulwark podcast two weeks ago. He suggests there are two Democratic parties, the Democratic Socialists of America (DSA) and the more moderate/traditional Democrats. These divisions mean the margin of victory might play a huge role in the market’s reaction. -- Carville: “I would be disappointed if it comes in at 225 House seats. That would almost be—I would rather the Republicans keep the House by five than the Democrats win by five because if that happens, they’re hostage to the DSA. Like, Hakeem [Jeffries] cannot move. He has nowhere to go. Even if you have a close Senate, [Sen. John] Fetterman would keep [Sen. Chuck] Schumer Pepto-Bismol all night. So I think this is one of those races where margin matters a lot.” -- We would add that if the Senate is a 51-49 Democrat majority, not only does presumed Senate Majority Leader Chuck Schumer have to worry about PA Senator John Fetterman siding with Republicans, but Vermont Senator Bernie Sanders and a presumed Michigan winner Abdul El-Sayed could put up a “block” because the Democratic Party is not progressive enough. This issue would come to a head almost immediately over data centers. Moderate/traditional Democrats, such as unions and middle-class voters, want those jobs. They are accelerationists. The DSA wants to block more data center construction. They are decelerationists. This could turn into an epic fight within the Democratic Party.