The rout in financial markets since January has claimed a big casualty: tech billionaires.
The market rout is a personal disaster for many investors
Apart from the defensive sectors and energy, the rest of the economy is impacted by the uncertainties surrounding growth.
The aggressive increase in interest rates by the Federal Reserve to crush inflation, which is at its highest in 40 years, has raised fears of a sharp slowdown in economic activity. These fears are a bad blow for growth assets like tech groups that are bets on the future.
Unsurprisingly, tech groups have been struggling for several months. The same tech companies didn't help matters by issuing dire warnings about the economic situation.
"We are being a bit more responsible through one of the toughest macroeconomic conditions underway in the past decade, I think it’s important that as a company, we pull together to get through moments like this," Sundar Pichai, chief executive officer of Alphabet (GOOGL) - Get Alphabet Inc. Reporttold employees last month.
Big Tech Wrecked
Google's parent company is in austerity mode: the company has canceled the next version of its Pixelbook laptop and dissolved the team responsible for building it. It has also made cuts at its Area 120 tech incubator whose goal was to keep some of the company’s talent in-house.
The Mountain View, Calif.-based firm has also cut several perks, travel and entertainment budgets.
"For the first 18 years of the company, we basically grew quickly basically every year, and then more recently our revenue has been flat to slightly down for the first time," Meta Platforms' (META) - Get Meta Platforms Inc. Report CEO Mark Zuckerberg told employees on Sept. 30.
He added that the company, which employed 83,553 people as of June 30, up 32% from 63,404 as of June 30, 2021, will be "somewhat smaller" by the end of 2023.
These various cost reduction measures seem to mark the end of a glorious era for Silicon Valley, which in recent years has become the favorite destination for talent. After having been one of the great beneficiaries of the covid-19 pandemic, tech is today one of the biggest victims of the downturn in growth.
There is also another way to look at the disaster caused to the sector by the current economic uncertainty: the fortunes of tech billionaires.
Musk, Bezos, Gates, Zuck All in the Red
In the Bloomberg Billionaires Index's top 25 fortunes, there are nine U.S. tech billionaires, six of whom are in the top 10. As of Oct. 15, these nine billionaires have together lost $386 billion in personal wealth since January.
Mark Zuckerberg, CEO of social media giant Meta Platforms, is the one whose fortunes have shrunk the most. It has lost $77.7 billion since January.
Next comes the richest an in the world. Elon Musk, CEO of Tesla (TSLA) - Get Tesla Inc. Report, the world's largest fortune, lost $72.5 billion.
Jeff Bezos, the founder of Amazon (AMZN) - Get Amazon.com Inc. Report is worth $62.7 billion less than at the beginning of January. Bezos is no longer the second richest man in the world. He gave up this position to the French businessman Bernard Arnault, CEO of the luxury group LVMH (LVMHF) (Dior, Louis Vuitton etc...)
Bill Gates, the co-founder of Microsoft (MSFT) - Get Microsoft Corporation Report and the fifth-richest person in the world, lost $33.3 billion, while Steve Ballmer, the former CEO of the software giant, saw his fortune decrease by $23.7 billion. Ballmer is the ninth richest in the world.
Larry Page, the seventh richest on the planet and co-founder of Alphabet, is worth $39.0 billion less than in January, while Sergey Brin, the other co-founder of the internet giant saw his fortune drop by $37.9 billion. Brin is ranked 8th world's richest person.
Finally, Larry Ellison, the founder of Oracle (ORCL) - Get Oracle Corporation Report and eleventh richest man in the world, has seen his net wealth decrease by $26.7 billion since January, while that of Michael Dell, founder of Dell Technologies (DELL) - Get Dell Technologies Inc. Class C Report and 24th richest man in the world, is worth $12.0 billion less compared to January.
The fortunes on paper of these tech billionaires are mainly based on their actions within their companies. Some will say that the decline in their wealth is a return to normal after it soared during the pandemic.
Interestingly, only six people in the top 25 wealthiest people on the planet have seen an increase in their wealth since January.
Among them is Chinese tech tycoon Zhang Yiming, whose wealth has increased by $10.4 billion since January, making him the 20th-richest person on the planet. He is the founder of Bytedance, the parent company of popular short video platform TikTok and its Chinese version Douyin.
BUFFALO, NY- March 11, 2024 – Impact Journals publishes scholarly journals in the biomedical sciences with a focus on all areas of cancer and aging research. Aging is one of the most prominent journals published by Impact Journals.
Credit: Impact Journals
BUFFALO, NY- March 11, 2024 – Impact Journals publishes scholarly journals in the biomedical sciences with a focus on all areas of cancer and aging research. Aging is one of the most prominent journals published by Impact Journals.
Impact Journals will be participating as an exhibitor at the American Association for Cancer Research (AACR) Annual Meeting 2024 from April 5-10 at the San Diego Convention Center in San Diego, California. This year, the AACR meeting theme is “Inspiring Science • Fueling Progress • Revolutionizing Care.”
Visit booth #4159 at the AACR Annual Meeting 2024 to connect with members of the Agingteam.
About Aging-US:
Agingpublishes research papers in all fields of aging research including but not limited, aging from yeast to mammals, cellular senescence, age-related diseases such as cancer and Alzheimer’s diseases and their prevention and treatment, anti-aging strategies and drug development and especially the role of signal transduction pathways such as mTOR in aging and potential approaches to modulate these signaling pathways to extend lifespan. The journal aims to promote treatment of age-related diseases by slowing down aging, validation of anti-aging drugs by treating age-related diseases, prevention of cancer by inhibiting aging. Cancer and COVID-19 are age-related diseases.
Agingis indexed and archived byPubMed/Medline (abbreviated as “Aging (Albany NY)”), PubMed Central, Web of Science: Science Citation Index Expanded (abbreviated as “Aging‐US” and listed in the Cell Biology and Geriatrics & Gerontology categories), Scopus (abbreviated as “Aging” and listed in the Cell Biology and Aging categories), Biological Abstracts, BIOSIS Previews, EMBASE, META (Chan Zuckerberg Initiative) (2018-2022), and Dimensions (Digital Science).
Please visit our website at www.Aging-US.com and connect with us:
NY Fed Finds Medium, Long-Term Inflation Expectations Jump Amid Surge In Stock Market Optimism
One month after the inflation outlook tracked by the NY Fed Consumer Survey extended their late 2023 slide, with 3Y inflation expectations in January sliding to a record low 2.4% (from 2.6% in December), even as 1 and 5Y inflation forecasts remained flat, moments ago the NY Fed reported that in February there was a sharp rebound in longer-term inflation expectations, rising to 2.7% from 2.4% at the three-year ahead horizon, and jumping to 2.9% from 2.5% at the five-year ahead horizon, while the 1Y inflation outlook was flat for the 3rd month in a row, stuck at 3.0%.
The increases in both the three-year ahead and five-year ahead measures were most pronounced for respondents with at most high school degrees (in other words, the "really smart folks" are expecting deflation soon). The survey’s measure of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) decreased at all horizons, while the median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—declined at the one- and three-year ahead horizons and remained unchanged at the five-year ahead horizon.
Going down the survey, we find that the median year-ahead expected price changes increased by 0.1 percentage point to 4.3% for gas; decreased by 1.8 percentage points to 6.8% for the cost of medical care (its lowest reading since September 2020); decreased by 0.1 percentage point to 5.8% for the cost of a college education; and surprisingly decreased by 0.3 percentage point for rent to 6.1% (its lowest reading since December 2020), and remained flat for food at 4.9%.
We find the rent expectations surprising because it is happening just asking rents are rising across the country.
At the same time as consumers erroneously saw sharply lower rents, median home price growth expectations remained unchanged for the fifth consecutive month at 3.0%.
Turning to the labor market, the survey found that the average perceived likelihood of voluntary and involuntary job separations increased, while the perceived likelihood of finding a job (in the event of a job loss) declined. "The mean probability of leaving one’s job voluntarily in the next 12 months also increased, by 1.8 percentage points to 19.5%."
Mean unemployment expectations - or the mean probability that the U.S. unemployment rate will be higher one year from now - decreased by 1.1 percentage points to 36.1%, the lowest reading since February 2022. Additionally, the median one-year-ahead expected earnings growth was unchanged at 2.8%, remaining slightly below its 12-month trailing average of 2.9%.
Turning to household finance, we find the following:
The median expected growth in household income remained unchanged at 3.1%. The series has been moving within a narrow range of 2.9% to 3.3% since January 2023, and remains above the February 2020 pre-pandemic level of 2.7%.
Median household spending growth expectations increased by 0.2 percentage point to 5.2%. The increase was driven by respondents with a high school degree or less.
Median year-ahead expected growth in government debt increased to 9.3% from 8.9%.
The mean perceived probability that the average interest rate on saving accounts will be higher in 12 months increased by 0.6 percentage point to 26.1%, remaining below its 12-month trailing average of 30%.
Perceptions about households’ current financial situations deteriorated somewhat with fewer respondents reporting being better off than a year ago. Year-ahead expectations also deteriorated marginally with a smaller share of respondents expecting to be better off and a slightly larger share of respondents expecting to be worse off a year from now.
The mean perceived probability that U.S. stock prices will be higher 12 months from now increased by 1.4 percentage point to 38.9%.
At the same time, perceptions and expectations about credit access turned less optimistic: "Perceptions of credit access compared to a year ago deteriorated with a larger share of respondents reporting tighter conditions and a smaller share reporting looser conditions compared to a year ago."
Also, a smaller percentage of consumers, 11.45% vs 12.14% in prior month, expect to not be able to make minimum debt payment over the next three months
Last, and perhaps most humorous, is the now traditional cognitive dissonance one observes with these polls, because at a time when long-term inflation expectations jumped, which clearly suggests that financial conditions will need to be tightened, the number of respondents expecting higher stock prices one year from today jumped to the highest since November 2021... which incidentally is just when the market topped out during the last cycle before suffering a painful bear market.
Homes listed for sale in early June sell for $7,700 more
New Zillow research suggests the spring home shopping season may see a second wave this summer if mortgage rates fall
The post Homes listed for sale in…
A Zillow analysis of 2023 home sales finds homes listed in the first two weeks of June sold for 2.3% more.
The best time to list a home for sale is a month later than it was in 2019, likely driven by mortgage rates.
The best time to list can be as early as the second half of February in San Francisco, and as late as the first half of July in New York and Philadelphia.
Spring home sellers looking to maximize their sale price may want to wait it out and list their home for sale in the first half of June. A new Zillow® analysis of 2023 sales found that homes listed in the first two weeks of June sold for 2.3% more, a $7,700 boost on a typical U.S. home.
The best time to list consistently had been early May in the years leading up to the pandemic. The shift to June suggests mortgage rates are strongly influencing demand on top of the usual seasonality that brings buyers to the market in the spring. This home-shopping season is poised to follow a similar pattern as that in 2023, with the potential for a second wave if the Federal Reserve lowers interest rates midyear or later.
The 2.3% sale price premium registered last June followed the first spring in more than 15 years with mortgage rates over 6% on a 30-year fixed-rate loan. The high rates put home buyers on the back foot, and as rates continued upward through May, they were still reassessing and less likely to bid boldly. In June, however, rates pulled back a little from 6.79% to 6.67%, which likely presented an opportunity for determined buyers heading into summer. More buyers understood their market position and could afford to transact, boosting competition and sale prices.
The old logic was that sellers could earn a premium by listing in late spring, when search activity hit its peak. Now, with persistently low inventory, mortgage rate fluctuations make their own seasonality. First-time home buyers who are on the edge of qualifying for a home loan may dip in and out of the market, depending on what’s happening with rates. It is almost certain the Federal Reserve will push back any interest-rate cuts to mid-2024 at the earliest. If mortgage rates follow, that could bring another surge of buyers later this year.
Mortgage rates have been impacting affordability and sale prices since they began rising rapidly two years ago. In 2022, sellers nationwide saw the highest sale premium when they listed their home in late March, right before rates barreled past 5% and continued climbing.
Zillow’s research finds the best time to list can vary widely by metropolitan area. In 2023, it was as early as the second half of February in San Francisco, and as late as the first half of July in New York. Thirty of the top 35 largest metro areas saw for-sale listings command the highest sale prices between May and early July last year.
Zillow also found a wide range in the sale price premiums associated with homes listed during those peak periods. At the hottest time of the year in San Jose, homes sold for 5.5% more, a $88,000 boost on a typical home. Meanwhile, homes in San Antonio sold for 1.9% more during that same time period.
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