The combination of Intrade spike in Obama's victory odds and the president's comfortable lead in battleground states makes his victory in November a near certainty. Barring a mishap in the upcoming debates, we should see more political status quo in Washington. In fact according to JPMorgan "since 1948, no challenger that lost ground in the polls in the month after his convention has ever been elected President."
As discussed before, this is somewhat positive for the equity markets (see post) - in the short-term. A Washington gridlock means that large corporations who view the federal government as their key customer will keep this revenue stream going. Also this assures that Bernanke stays with the Fed, pumping more liquidity into the markets. The long-term effects however are far less certain.