Even with a very weak jobs report to start the month and a contractionary Chicago PMI reading to end it, President Obama's Intrade.com odds to win re-election have surged in September. At the start of the month, Obama's odds to win were at 55%. This morning his odds touched 80%.
And it's not just the President's odds that have bounced significantly this month. The odds for the Democrats to win the Senate have also spiked, and the party is now expected to win. On the last day of August, it was almost assured that the GOP would take back the Senate. Now the Dems hold a big lead with odds to win at 65%.
Based on the recent trend, should the GOP be concerned about losing the House as well? While the Intrade.com odds for the Dems to take back the House are still low at 25%, they're up 15 percentage points over the last few weeks. At 80% versus 73%, the Intrade odds for Obama to win are higher than the odds for the GOP to win the House.
The market should be okay if control of Congress and the Presidency is split again, but it likely wouldn't be okay if Dems took full control of everything. While the first two year's of Obama's presidency were an exception, historically, the market has struggled when one party has held all the cards.