ISLAMABAD: The top business tycoons around the world on Tuesday, experienced a huge dent in their fortunes, as their net worth dipped due to the higher-than-expected US inflation data that roiled the Wall Street.
Jeff Bezos’s wealth plunged by $9.8 billion (Rs2.93 trillion) in a day, the most among those tracked by the Bloomberg Billionaires Index. Meanwhile, the Mint reports that the world’s richest person Elon Musk’s net worth dropped by $8.4 billion (Rs1.97 trillion).
The fortunes of Mark Zuckerberg, Larry Page, Sergey Brin and Steve Ballmer all fell by more than $4 billion (Rs937 billion), while Warren Buffett and Bill Gates lost $3.4 billion (Rs796 billion) and $2.8 billion, (Rs656 billion) respectively, as per the Bloomberg data.
Jeff Bezos is the founder of Amazon, the world’s biggest online retailer. The Seattle-based company sells electronics, household goods and other products through its flagship website. He also owns space exploration company the Blue Origin.
Musk is the chief executive of Tesla, which sells electric vehicles and home solar batteries. Musk is also the chief executive of SpaceX, a rocket manufacturer tapped by Nasa to resupply the space station, and has a huge stake in social networking company Twitter.
The Bloomberg Billionaires Index is a daily ranking of the world’s richest people and the figures are updated at the close of every trading day in New York.The US consumer price index (CPI) increased 0.1% from July, after no change in the prior month, the Labour Department data showed.
From a year earlier, prices climbed 8.3%, a slight deceleration but still more than the median estimate of 8.1%. The so-called core CPI, which strips out the more volatile food and energy components, also topped forecasts.
Wall Street shares plunged, with the Dow losing nearly 1,300 points and the S&P 500 falling 4.3 percent, after the hotter-than-expected report, closely watched by the Federal Reserve as it prepares for its next interest rate decision next week.
The Fed Chair, Jerome Powell, has made it clear the increase in the benchmark lending rate would continue until the inflation is tamed. Inflation has soared around the globe this year owing to sky-high energy and food bills. Stocks had rebounded in recent days, as investors clung to the hope that the slowing price rise would allow the Federal Reserve to eventually pull back on its tough anti-inflation fight, but ironically, the data has snuffed out all such hopes for now.
When this scribe contacted Dr Khaqan Najeeb, an ex-adviser to the Ministry of Finance for comments, he said: “The long period of steady growth and low inflation, the US economy is being replaced by a higher inflationary world with market volatility reverberating through the new atmosphere in the economy.”
Najeeb elaborated that instead of the falling month-on-month, headline inflation actually rose by 0.1 percent, taking the annual rate to a high of 8.3 percent. But worse was the reading of core inflation, the predicted 0.3 percent rise actually came in high at 0.6 percent, with the annual pace of change rising from 5.9 percent to 6.1 percent.
Dr Khaqan clarified that this scenario led to an acute panic across the markets and the three averages fell steeply. The Dow Jones Industrial Average fell 3.9 percent to post its worst day since June 2020. The S&P 500 was down 4.3 percent and the Nasdaq Composite Index saw the largest fall of 5.2 percent in its worst day since March 2020, during the time of the traumatic Covid panic.
Najeeb concluded that every single stock in the Nasdaq 100 finished in the red. This has severely hurt the fortunes of shareholders of Tesla and Amazon, including a host of major shareholders across the stock markets.
