Nov 22, 2019 - Economy

World’s biggest hedge fund bets $1 billion on a 2020 stock market fall

Ray Dalio, Bridgewater Associates Founder, President and CIO,

Bridgewater Associates founder, president and CIO Ray Dalio. Photo: David A.Grogan/CNBC/NBCU Photo Bank/NBCUniversal via Getty Images

Bridgewater Associates bet more than $1 billion that either the S&P 500, the Euro Stoxx 50 or both will fail by March, the Wall Street Journal reports.

The big picture: The massive wager is one of a growing number of bearish trades as stock markets reach new highs and as some investors worry about a correction. It's also caused the price of some options to rise.

What to watch: March 2020 is well into the Democratic primaries. If Sen. Elizabeth Warren wins the Democratic nomination or the presidency, some financial predictions show markets will fall.

  • As Axios' Dan Primack has reported, Warren has put a bullseye on Wall Street, private equity and her overall fight against corporations.

Bridgewater declined to comment on its trades to WSJ: "We have no positions that are intended to either hedge or bet on any potential political developments in the U.S."

  • Its founder, Ray Dalio, tweeted later on Friday that the article is "wrong": "I want to make clear that we don’t have any such net bet that the stock market will fall."

Go deeper: Elizabeth Warren's frontrunner status is bad news for private equity

Editor's note: This article has been updated to include a tweet from Bridgewater founder Ray Dalio.

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