From Merrill Lynch: Elections: what keeps us up at night?

The US elections are quickly approaching and, in our view, have become one of the most significant near-term risks for the economy and markets. The facts are changing quickly, both in terms of the policies that each candidate supports but also in terms of expectations over the outcome of the election. According to the Iowa Electronic Markets (IEM) and PredictWise, Clinton currently has about a 70-75% chance of winning the election. FiveThirtyEight, a political aggregator, is expecting a closer race with Clinton’s chances at only about 60%. According to IEM and PredictWise, the probability of Republicans retaining control of the House is running at 70%-90%, and the probability of Democrats taking control of the Senate is about 40%-60%.

Although the race has narrowed, the markets and political aggregators are suggesting the most likely outcome is split government, with Hillary Clinton in the White House and the Republicans in control of the House. This would imply that the gridlock in Washington continues and that policy changes would not be significant – which is assumed in our baseline economic forecasts. However, we cannot rule out the possibility of a Republican sweep. As our strategists have noted, the initial reaction to a potential Trump victory would likely be a risk-off event in the markets, which we think could end up delaying the Fed from hiking in December.
emphasis added

CR Note: All key analysts are assuming Ms. Clinton will be the next President (my forecasts also assume a Clinton presidency).  The alternative is too grim to contemplate.

• At 8:30 AM ET, Personal Income and Outlays for August. The consensus is for a 0.2% increase in personal income, and for a 0.2% increase in personal spending. And for the Core PCE price index to increase 0.2%.

• At 9:45 AM, Chicago Purchasing Managers Index for September. The consensus is for a reading of 52.0, up from 51.5 in August.

• At 10:00 AM, University of Michigan’s Consumer sentiment index (final for September). The consensus is for a reading of 90.1, up from the preliminary reading 89.8.