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Ray Dalio Warns Stocks Losing Buffer Against Rising Bond Yields
Dalio said earnings still support stocks, but free cash flow may weaken as governments and companies compete for capital, keeping pressure on yields.
- On Thursday, Bridgewater Associates founder Ray Dalio warned that stocks face mounting pressure from rising bond yields and weaker corporate cash flows, as the 10-year Treasury yield hit 5.36% this week, its highest level since 2002.
- Dalio's remarks build on comments he made Wednesday in Singapore, where he described artificial intelligence as a classic bubble, with debt accumulation and climbing interest rates driving stress in fixed-income markets as AI investment and government borrowing compete for capital.
- Dalio told CNBC's Sri Jegarajah at the Milken Institute Asia Summit that investors must prioritize free cash flow over earnings, warning "While earnings should continue to be improving, I would expect the free cash flows, I think, will be deteriorating."
- The global bond sell-off will persist as governments and companies compete for capital, Dalio predicted, with higher borrowing costs eventually forcing reductions in credit and spending that could spill into equity markets.
- Despite his warnings, Dalio declined to call for a near-term selloff, noting that financial conditions remain loose enough that borrowing and consumer activity have yet to feel meaningful drag, adding "We know that we haven't yet put the brakes on.
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Ray Dalio, founder of Bridgewater Associates, warned at the Milken Institute Asia Summit in Singapore that stock markets could become increasingly vulnerable to the twin pressures of rising bond yields and deteriorating corporate free cash flow, CNBC reported. We will be covering similar topics at our Portfolio Investment Day conference on October 21. One of the biggest investment events of the year is coming up, where professional experts will …
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Ray Dalio warns that the rise in bond yields reduces the holding margin of the Bags. Under observation the cash flows of the companies, the credit and the increase of the public and company debt.
Coverage Details
Total News Sources12
Leaning Left2Leaning Right0Center3Last UpdatedBias Distribution60% Center
Bias Distribution
- 60% of the sources are Center
60% Center
L 40%
C 60%
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