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John Authers

Investors Surfing the Blue Wave Trade Need a Hedge

Plenty can still go awry with the market-calming prospect of a Democratic sweep in next month’s elections.

Don’t count on anything yet.

Don’t count on anything yet.

Photographer: Al Drago/Bloomberg

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One trade dominates talk at the moment: “The Blue Wave Plus Vaccine.” With Joe Biden well ahead in the polls, Democratic candidates with their noses ahead in enough states to retake a majority in the Senate, and several vaccine candidates now into the final stages of testing, the bet is on that we should now prepare for a big growth spurt. Democrats will arrive, and spend money not only to tide people through the pandemic, but to help them rebuild, putting fiscal stimulus back in place for the first time in a generation. With a vaccine at last available, people will have the confidence to go back to work, and to play.