Bernard Arnault, the wealthiest person in the world, experienced a significant decrease of $11.2 billion in his fortune in just one day, raising concerns about a potential slowdown in the US economy and its impact on the demand for luxury goods, Bloomberg reported.
As the founder of LVMH, a conglomerate that encompasses prestigious brands such as Louis Vuitton, Moet & Chandon, and Christian Dior, Arnault had witnessed a remarkable surge in his wealth throughout 2023, primarily driven by the rising share prices of European luxury companies.
However, on Tuesday, a decline in LVMH shares sent shockwaves through the market. The shares plummeted by 5% in Paris, marking the most substantial drop in over a year, and causing the European luxury sector to lose approximately $30 billion.
Despite this setback, Bernard Arnault's net worth remains substantial at $191.6 billion, according to the Bloomberg Billionaires Index. Impressively, he has still accumulated an additional $29.5 billion in wealth so far this year.
The narrowing gap between Arnault and Elon Musk, the second-richest person globally and CEO of Tesla Inc., is notable. Currently, the difference between their fortunes is a mere $11.4 billion. This adjustment in rankings reflects the recent market dynamics and the impact of Tuesday's market rout.
While LVMH's share price rally had been sustained for an extended period, Tuesday's downturn emerged as a stark reversal. Nevertheless, the company's share price remains 23% higher than it was at the beginning of the year. Additionally, the MSCI Europe Textiles Apparel & Luxury Goods Index has surged by an impressive 27%, indicative of the overall strength of the European luxury sector.
During a luxury conference in Paris, organized by Morgan Stanley, attendees expressed concerns about a potentially subdued performance in the United States. Edouard Aubin, an analyst at the investment bank, highlighted this sentiment, stating, "There is a relatively more subdued outlook for the US luxury market."
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This cautious approach was further emphasized by analysts from Deutsche Bank AG, Matt Garland and Adam Cochrane, who noted in a research note that investors are expected to become more discerning when selecting European luxury stocks due to worries about slowing growth in the US.
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