Investors were already placing their bets on the government-chartered mortgage firms after Democrats took the House. Shares of Freddie Mac (FRE) and Fannie Mae (FNM), which endured accounting scandals and plenty of criticism from the GOP in recent years, jumped during Wednesday trade.
A Democrat win is likely to mean a lot less scrutiny from lawmakers, says Prudential's senior Washington strategist Charles Gabriel, particularly since the two outfits have ties to the Democratic party.
"A Democrat victory in just the House would put a cherry on top of a story (after) political risk concerns had peaked," says Gabriel.
Winner: Fannie and Freddie
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