What does the chart show?
The chart shows what Elon Musk’s net worth will be on the 31st December 2026, as priced over the last four weeks. The figure is derived from bets placed on Kalshi, the online US exchange that facilitates event-based trading around real world outcomes. It shows that four weeks ago Mr Musk’s implied net worth at the end of the year was a touch above $1trillion. It fell steadily over the next three and half weeks before shedding $150bn in just a couple of days following the US mid-term elections. His expected net worth at the time of writing is $751bn.
Why this is important
Many readers would argue Elon Musk’s net worth is not important (your author included), but as a bellwether for all things tech and sentiment around AI, the chart says it all. The ‘blue wave’ resulting from the US mid-terms was voters responding in large part to high domestic gasoline prices, rather than being an anti-Trump vote specifically. But the reason US gasoline prices are so high lies squarely with President Trump and his war with Iran, so the election result sends a clear message.
Elon Musk is thought to have spent north of $470m on the US mid-term elections. Almost half of that was channelled into Texas to help finance the Republican campaign there, but it backfired as The Lone Star state turned uncharacteristically blue. Mr Musk’s business interests are for the most part headquartered in Texas so he has a vested interest in garnering influence with the state’s politicians. As it turns out though his financial efforts to swing the state failed and a less ‘tech bro’ leaning Congress has been bad for his financial health. At $751bn his net worth would only be worth half what it was in the week after the SpaceX IPO in July ($1.45trn). Then again, had it worked it would have looked like money well spent.
More broadly, around $2.5-3trn is estimated to have been wiped off global technology stocks in the last few trading sessions as jittery markets, earnings disappointment (from high expectations) and concern around the scale of AI investment (and its circularity) weighed on stocks. It hasn’t all been bad though and quality stocks have curried new favour amidst the volatility. For more diversified, less concentrated investors like ourselves, we should expect performance versus our peers and the market to compare favourably.
Markets were pulled between resilient economic data and renewed concerns over inflation, politics and artificial intelligence investment, leaving interest-rate expectations and concentrated technology exposure as the week's principal sources of volatility.
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October payrolls rose by 165,000, well above expectations, while unemployment fell to 4.1%. The combination of resilient hiring and firmer wage growth reduced the case for near-term monetary easing.
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The midterm elections delivered Democratic control of both chambers of Congress. Markets initially welcomed the removal of electoral uncertainty, although the resulting divided government leaves the policy outlook less predictable.
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Technology shares came under renewed pressure as investors questioned the financing and prospective returns from artificial intelligence infrastructure. Local opposition to data-centre development added a political constraint to an already demanding investment case.
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Hopes of progress in US-Iran negotiations drove a sharp fall in oil prices. This eased an important source of inflation pressure, but the benefit was not enough to offset concerns around technology valuations and future interest rates.
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The Bank of England raised Bank Rate by 0.25 percentage points to 4.0%, with all nine policymakers supporting an increase. The unanimous vote underlined concern that inflation remains too persistent to ignore.
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The Bank expects inflation to approach 5% next year, largely because of higher energy costs. It nevertheless stressed that the increase should not be interpreted as the start of an automatic sequence of rate rises.
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Services activity strengthened in October, with improving new business and the first increase in employment for two years. This resilience gave policymakers more scope to tighten policy despite pressure on household finances.
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Construction remained weak, particularly in residential building, as high borrowing costs and subdued confidence constrained demand. Faster input-cost inflation also highlighted the difficult combination of soft activity and persistent price pressure.
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Eurozone inflation rose to 4.0% in October, its highest level for three years, primarily because of energy costs. Core inflation was steadier, suggesting that the European Central Bank faces renewed headline pressure rather than a broad acceleration across prices.
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Business activity continued to expand, but the composite purchasing managers' index slowed to a four-month low. Softer demand, weaker confidence and higher input costs pointed to a fragile growth backdrop.
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German factory orders rebounded in September, led by domestic and capital-goods demand. The improvement was encouraging, although the broader three-month trend remained broadly flat and did not yet signal a decisive industrial recovery.
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The sharp fall in oil prices provided some relief for consumers and energy-intensive businesses. However, low regional gas storage and continuing geopolitical uncertainty mean Europe's inflation and growth outlook remains sensitive to energy markets.
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Asian technology markets sold off sharply after the US decline, with semiconductor-heavy markets in Japan, South Korea and Taiwan particularly affected. The episode demonstrated how closely regional indices are now linked to the global artificial intelligence investment cycle.
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China's manufacturing survey moved back into contraction as weaker demand weighed on confidence. Policymakers responded with measures to support equity markets, but the muted initial reaction showed that investors remain focused on underlying economic momentum.
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The Reserve Bank of Australia raised its cash rate by 0.25 percentage points to 4.85% as inflation remained a concern. The decision reinforced the wider message that some central banks still face pressure to tighten policy.
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India proved relatively resilient during the regional technology sell-off, reflecting its lower direct exposure to the semiconductor cycle. Meanwhile, falling oil prices offered broader relief to energy-importing Asian economies after recent inflation pressure.
