US Stock losses wipe out $9 trln from America’s wealthy ‎

Falling US stock markets have wiped out more than $9 trillion of American household wealth, putting more pressure on household budgets and spending.

Americans’ holdings of corporate stocks and mutual funds fell to $33 trillion at the end of the second quarter, compared to $42 trillion at the beginning of the year, according to Federal Reserve data.

With the major market indices falling further since early July, and the bond market adding more losses, market experts say, according to “CNBC”, that the current wealth losses from financial markets could reach $9.5 trillion to $10 trillion.

Economists say this downturn could begin to weigh on the economy, putting more pressure on Americans’ balance sheets and potentially hurting spending, borrowing and investment.

For his part, Mark Zandi, chief economist at Moody’s Analytics, said the losses could reduce real GDP growth by about 0.2 percentage points over the next year.

The wealthy bear the greatest losses, because they own a large share of the stock. The wealthiest 10% of Americans have lost more than $8 trillion of their wealth in the stock market this year, which represents a 22% drop in their financial wealth, according to the Federal Reserve. The richest 1% lost more than $5 trillion in stock market fortune. 50% of the lower class lost about $70 billion in stock wealth.