- Dow Jones Industrial Average (DJIA) futures were flat on Wednesday, pointing to a nervous stock market open.
- With US stocks at record highs, billionaire hedge fund manager Ray Dalio warned that growth is unsustainable and a “big squeeze” is coming.
- In the same week, Dalio released a provocative essay entitled The World has Gone Mad and the System Is Broken.
After hitting record highs in two consecutive days, Dow (DJIA) futures contracts traded flat on Wednesday, indicating a nervous stock market open.
As stocks hover at all-time highs, billionaire hedge fund manager Ray Dalio added his voice to the chorus of investors sounding the oversold alarm. Speaking to CNBC, Dalio said investors are “buying dreams” rather than evaluating the fundamental value of companies.
“They’re selling dreams. They’re not selling earnings, and they’re not even selling a path to earnings.”
Dalio warned that “a big squeeze” is looming and the Federal Reserve can’t keep pumping cash forever.
Dow futures on knife edge
Dow Jones Industrial Average (DJIA) futures swung in and out of positive territory overnight, settling flat ahead of the opening bell.
Dow Jones Industrial Average (DJIA) futures struggled for direction on Wednesday. Source: Yahoo Finance
Dalio: investors are “buying dreams”
The billionaire’s warning comes on the same day he released a damning essay on the state of the global economy, entitled The World has Gone Mad and the System Is Broken. In it, he blamed the Federal Reserve’s loose monetary policy for artificially inflating stocks beyond their fundamental value.