The U.S. midterm elections played out much as expected, with Democrats picking up the 23 seats (and more) needed to retake the majority in the House of Representatives and Republicans easily defending their majority in the Senate. While divided governments have generally been decent for markets, we see greater policy risks than in past elections, including infrastructure on the upside and potential for government shutdowns, investigations and impeachment on the downside – not to mention trade policy risk, which is likely to continue unabated. These risks point to increased volatility and underscore our more defensive ... (full story)