KGI Securities (Thailand) noted that the United States is holding its midterm elections today, with Decision Desk HQ (DDHQ) data indicating an 83% probability that the Democratic Party will secure a majority in the House of Representatives and a 63% chance of gaining control of the Senate. However, several political analysts believe Republicans could retain the Senate, arguing that historical polling has tended to overestimate the Democrats’ chances of winning.
Even if Democrats gain control of both chambers, their ability to overturn President Donald Trump’s executive orders would remain limited. Congress can introduce new legislation to challenge, amend, or repeal an executive order. However, the President could veto such legislation, requiring both the House and Senate to secure a two-thirds supermajority to override the veto.
Historical voting records show that achieving this threshold has been relatively uncommon, according to KGI. Consequently, most or potentially all executive orders issued by Trump could remain in effect even if Democrats win control of both chambers.
Historical market data since the 1970s also suggest that a divided Congress has been more favourable for the S&P 500 under Republican presidents. The index delivered an average annual return of 13.7% during periods of divided government, compared with 4.9% when Democrats controlled both chambers.
KGI attributed this stronger performance to the checks and balances provided by a divided Congress, which can prevent more extreme policies that could weigh on financial markets. A Democratic sweep in the midterms, as currently expected by consensus, could limit the upside potential of U.S. equities. Nevertheless, investors should also monitor other market drivers, particularly developments in the Middle East and U.S. monetary policy.
For Thai equities, KGI believes much of the uncertainty surrounding international developments has already been priced in, recommending investors accumulate stocks during periods of volatility.
The brokerage outlined three preferred investment themes for November. First, it favours banks, which are well positioned to benefit from an anticipated recovery in private-sector investment and attractive interim dividends for the second half of 2026.
Second, it sees opportunities in major companies linked to Thailand’s data centre development, selecting GULF, STECON and WHA. Although the implementation of new regulatory criteria could be postponed to the first quarter of 2027, positive catalysts remain ahead.
Finally, KGI expects hotel operators focused on the domestic market to benefit from the upcoming high season, with CENTEL as its preferred stock in the sector.
