There has been some very big news regarding the so-called “generic ballot” recently. I’ll share that news in just a moment. But what has surprised me the most recently is how few adults even know what the generic ballot is, much less how to follow it on a regular or even occasional basis and why it is so important.
This surprises me because the generic ballot is one of the most predictive and accurate polls out there when it comes to congressional and presidential elections.
Given the impressive forecasting record of the generic ballot, it is something all likely voters, Democrat, Republican and Independent, should know about and understand. Given that, the generic ballot is where we will start our discussion today. I realize many of my readers already know about the generic ballot, so bear with me, but I was quite surprised at how many relatives, friends and colleagues did not know what it was or how to follow it.
So, what is the generic ballot? The generic ballot is a political poll which asks not which candidate you plan to vote for to represent you in Congress or for president, but rather which political party (Democrat, Republican or Independent) you would vote for if the election were held today.
It’s called the “generic ballot” precisely because it includes no specific names of candidates. The generic ballot is a voter survey conducted by various polling groups including Gallup, Rasmussen, RealClearPolitics and numerous others.
Now, here’s the latest big news on the generic ballot. Over the last couple of weeks, the Republicans have risen to a historic lead in the generic ballot. The GOP now holds an unprecedented 10-point lead in the latest generic ballot. This is the largest lead the Republicans have held since the generic ballot began over 40 years ago.
Rasmussen’s generic ballot poll earlier this month has the GOP up a whopping 13 points, by far the highest reading it has ever recorded for the Republicans.
Such a commanding lead less than one year from the elections suggests – if the current lead holds up – the GOP will retake the majority in both the House and the Senate by a comfortable margin next November. Based on the highly predictive nature of the generic ballot, it’s the Republicans' race to lose at this point.
If this lead, or anything close to it, holds up it will be a disaster for the Democrats, and they are all too aware of where the generic ballot stands today. This may explain why several prominent Democrats have announced recently they will not be running for re-election next year.
How Bad Could It Be For Democrats in 2022? Really Bad!
Midterm elections in particular can be hard to gauge which is one reason why pollsters use the generic ballot question to determine which party may be favored to win the bulk of upcoming congressional races. The simple question, posed to voters across the country is: Which party do you intend to vote for in the upcoming 2022 midterm election?
The answer to this question has correctly predicted political waves, such as Democrats taking the House in 2006, and Republicans taking it back in 2010 and making more gains in 2014.
Looking ahead to 2022, the generic ballot question has been swinging hard in favor of Republicans taking back control of the House and possibly the Senate with the potential for a historic sweep next year. Just how bad is it looking for Democrats?
As noted above, the most recent polling on the question, courtesy of ABC News and The Washington Post, gives Republicans a 10-point lead on the generic ballot question, a number which is bigger than a 2014-style monumental victory for the GOP:
Of course, that 10-point lead could be cut in half by then, or it could expand, depending on how President Biden manages the economy and runaway inflation. For some perspective, in 2014, Republicans were winning this question by only 2.4 points on average and went on to gain 13 extra seats in the House and took control of the Senate.
With a 10-point lead, the Republicans could actually be in landslide territory. The GOP is in this historically strong position because the public has already soured tremendously on the Biden agenda which includes everything from Afghanistan to vaccine mandates, not to mention his liberal legislative priorities.
Clearly, the most overriding issues with voters are the economy and inflation with immigration a distant third. As Americans continue to see increases at the gas pump, the grocery store and elsewhere, with a tone-deaf response from Washington, Democrats will see their soft support continue to deteriorate.
There are other polling bits buried within the ABC/Washington Post numbers which also spell doom around the electoral battlefield for Democrats. For one, Republicans are sitting at a whopping 23-point advantage in Senate battleground states, meaning the GOP could conceivably take both the House and the Senate in 2022.
Yes, the election is a year out, so Democrats will argue these numbers will improve as more of Biden’s unpopular agenda starts paying dividends early next year. That could be true, or it could also be that over-promising on relief for things like gas and grocery prices, then under-delivering could make matters worse for the President’s party.
Beyond control of the House and Senate, Biden is now underwater on every major issue including handling COVID and the economy, and his job approval in general.
If it boils down to the economy, then Democrats are toast as it appears the economy, which has slowed to only 2% GDP, is likely to stay in slow growth mode for at least the next year. Meanwhile, voters believe the Biden administration is severely overreaching with sweeping legislation aimed at adding vast new entitlement programs destined to cost trillions for decades to come. This is not bullish for the economy and most voters know it.
Implications For Our Investment Portfolios Just Ahead
As we all know, the US stock and bond markets have been incredibly resilient over the last 30+ years. As for the bond market, I believe there is a very good chance the yield on the 30-year Treasury bond bottomed last year in June/July.
While there is currently no reason to believe long-term rates are headed significantly higher just ahead, the trend now appears to be higher. And we know the Fed is ending asset purchases and will begin raising short-term interest rates sometime next year.
As for the stock market, I have no clear idea where we are going from here. The S&P 500 Index hit yet another record high last week and again this week, which is always a bullish sign. However, we all know this bull market has been ongoing since 1990, albeit with temporary downturns in 2000-2002 and 2008-2009, and has risen far beyond our wildest expectations.
I have no reason to believe the stock market will top out this year and head lower. On the other hand, I have no reason to believe it won’t. What we do know is this bull market is awfully long in the tooth. With a slow economy expected this year and a series of interest rate hikes to come, some of the tailwinds the market has enjoyed for the last two decades or longer may be going away.
I haven’t promoted our investment products and strategies in several months, but I remind you we have several equity programs at Halbert Wealth Management which have the potential to make money whether the stock market is rising or falling. Maybe it’s time to take another look at these professionally managed strategies.
We also offer several other strategies which do not involve stocks or bonds, programs you are not likely to see at other Investment Advisors. These include several income strategies, real estate strategies and others, plus our Alpha Advantage Strategy which has delivered attractive results over the last six years. Be sure to take a look at the Alpha Advantage FACT SHEET to see the actual performance.
As always, past performance is not necessarily indicative of future results. I encourage you to contact one of my experienced Investment Consultants, Phil Denney or Spencer Wright, to discuss which of our investment strategies may be best for you. Phil and Spencer have both been with me for over 20 years, and they will take great care of you. Call 800-348-3601.
HAPPY THANKSGIVING, EVERYONE! As Americans, we all have much to be thankful for. As for me, I have a terrific family, with two new grandkids who arrived this year. Lakelyn Rose, our second grandchild, was born on October 21. FYI, my new nickname the grandkids will call me (when they can talk) will be “Big Dog.” It’s a long story that goes way back to my many years coaching multiple youth sports. While it wasn’t my idea, the kids are both set on it.
The other thing I’m always thankful for is YOU, our clients and readers! We all relish and appreciate you, and we wish you all a very HAPPY THANKSGIVING holiday!! Be safe, everyone.
Best personal regards,
Gary D. Halbert
Forecasts & Trends E-Letter is published by Halbert Wealth Management, Inc. Gary D. Halbert is the president and CEO of Halbert Wealth Management, Inc. and is the editor of this publication. Information contained herein is taken from sources believed to be reliable but cannot be guaranteed as to its accuracy. Opinions and recommendations herein generally reflect the judgement of Gary D. Halbert (or another named author) and may change at any time without written notice. Market opinions contained herein are intended as general observations and are not intended as specific investment advice. Readers are urged to check with their investment counselors before making any investment decisions. This electronic newsletter does not constitute an offer of sale of any securities. Gary D. Halbert, Halbert Wealth Management, Inc., and its affiliated companies, its officers, directors and/or employees may or may not have investments in markets or programs mentioned herein. Past results are not necessarily indicative of future results. All investments have a risk of loss. Be sure to read all offering materials and disclosures before making a decision to invest. Reprinting for family or friends is allowed with proper credit. However, republishing (written or electronically) in its entirety or through the use of extensive quotes is prohibited without prior written consent.
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